Get Educated on 529 College Plans
Given the ridiculous cost of higher education these days, I try to stay keenly aware of how much I’ll need to save for my children’s education. Which is to say I’m horrified about the mere thought and want to squirrel away as much money as possible until that time comes.
The costs of college have gotten absurd, particularly when compared with the Consumer Price Index (CPI), which is a measure of inflation. Needless to say, you need a lot of money to put kids through school.
So it’s fortunate that as a financial writer, I’m also keenly aware of both the short- and long-term benefits offered by a 529 Plan — one of the best ways to protect your investment money when it comes to children.
You can open a 529 Plan — which gets its name from section 529 of the Internal Revenue Code — once your child receives his or her Social Security Number. This won’t take long. My daughter’s came in the mail about a week after she was born — Uncle Sam needs to track his revenue-generators, after all.
Armed with your child’s SSN, you can open a 529 Plan that is operated by either a state or an institution. In most cases, you can open an account with any state, even if you don’t live in that state and don’t know if your child will attend college in that state.
We live in Maryland, my daughter was born in Texas, and the 529 Plan we chose is out of New York. Who knows where she’ll end up going to college?
The important thing is that you start saving for it now.