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Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
529 college savings plans are often thought to be the most effective way to save for college education expenses. Contributions to these plans can be deducted from state income tax, grow federal and state tax-free, and can even be withdrawn tax-free for the use of higher education expenses, such as tuition, room and board, books and other similar costs. With the increasing amount of 529 plans, some are finding that a portion of the plan balance may not be needed, in fact, for college expenses.
Due to the variability in college expenses, planning for the precise amount can be difficult. There are so many factors that affect college expenses. In-state versus out-of-state tuition costs vary, as do public versus private institution costs. Future tuition inflation levels and scholarships also can greatly affect a student’s college expenses. Unlike some other child savings avenues, 529 plans give account owners control. 529 plans also provide ways to divert and divest the surplus or unused amount in the plan. Some options account owners have are:Read More