A number of separate studies all confirm one thing both parents and college-bound students already know: the cost of tuition is rising steeply and is expected to continue climbing. So as you watch your toddler play or send your daughter off to her first day of kindergarten, you may be wondering how you’ll be able to pay for college in the future.
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Many parents are turning to 529 savings plans as a way to not only put money aside for college, but to also lock in tuition prices to help them to avoid falling short. 529 plans provide you with tax benefits, in that you do not have to pay taxes on the account’s earnings. Additionally, you will not be hit with income limitations and you may use the funds for any member of your family.
Plans vary from state to state, but you are not limited to investing in your particular state’s program. This means you may invest in one state’s 529 plan and send your kid off to school in another location.
Each plan has different features and benefits, so make sure to do your research to find the program that is best for you and your child.
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