As always, I offer no credentials nor am I a financial advisor. I do offer to the reader my own research and opinions which should be checked with your accountant or tax advisor and your own investigation before taking any actions based on this post or the links it contains. Caveat emptor!
[Also check out my other personal finance threads at the bottom.]
If you have kids, nieces/nephews/grandchildren you should take a look at your state's 529 plan and see if you could get a tax benefit for saving for college. Otherwise, choose any state's plan that has the lowest costs and is well-managed and allows you to invest.
For example, we use the Georgia Path2College plan up to the max allowed per child but then have decided to put anything above that (if we have anything) in a Utah my529 plan which has nice age-based plans that are great for what we are targeting relative to asset allocation and like the "age glide path" that shifts across different funds over time.
Georgia has increased its tax-advantaged limits over the last couple years so if you're in GA or a handful of other states, you can get some good tax advantages. Also, Fidelity has a 2% cash back credit card that you can direct all your cash back to a 529. You could save hundreds or thousands in a 529 just by doing this (assuming you pay off your cc each month!) We route all cash back from anything we get from banks to this fund.
Lots of caveats and things to think about before you do a 529, but if you're sure your kid/niece/nephew/godchild/grandchild/kidfriend is going to college, it's great deal if you can get a tax benefit. You can also use some of the 529 savings for private k-12 schools.
So, do your due diligence but it could be a great way to save now for college in the future. Even at $25-$100 / month for 10-20 years you're probably able to pay for housing or food or books!
Clark Howard's (free) and Morningstar's ($$$) are the best guides, IMHO. Several other good guides are available. The plans and funds inside the plans can change year to year so make sure you review your plan each year or whenever changes occur. You can move money from one 529 to another without withdrawing it if you decide to go to a different provider.
[These links are also now under Personal Finance in the secondary navigation menu near the top.]
[Also check out my other personal finance threads at the bottom.]
If you have kids, nieces/nephews/grandchildren you should take a look at your state's 529 plan and see if you could get a tax benefit for saving for college. Otherwise, choose any state's plan that has the lowest costs and is well-managed and allows you to invest.
For example, we use the Georgia Path2College plan up to the max allowed per child but then have decided to put anything above that (if we have anything) in a Utah my529 plan which has nice age-based plans that are great for what we are targeting relative to asset allocation and like the "age glide path" that shifts across different funds over time.
Georgia has increased its tax-advantaged limits over the last couple years so if you're in GA or a handful of other states, you can get some good tax advantages. Also, Fidelity has a 2% cash back credit card that you can direct all your cash back to a 529. You could save hundreds or thousands in a 529 just by doing this (assuming you pay off your cc each month!) We route all cash back from anything we get from banks to this fund.
Lots of caveats and things to think about before you do a 529, but if you're sure your kid/niece/nephew/godchild/grandchild/kidfriend is going to college, it's great deal if you can get a tax benefit. You can also use some of the 529 savings for private k-12 schools.
So, do your due diligence but it could be a great way to save now for college in the future. Even at $25-$100 / month for 10-20 years you're probably able to pay for housing or food or books!
Clark Howard's (free) and Morningstar's ($$$) are the best guides, IMHO. Several other good guides are available. The plans and funds inside the plans can change year to year so make sure you review your plan each year or whenever changes occur. You can move money from one 529 to another without withdrawing it if you decide to go to a different provider.
- https://clark.com/education/clarks-529-plan-guide
- https://www.morningstar.com/save-for-college
- https://www.bogleheads.org/wiki/529_plan
- https://www.savingforcollege.com/529_plan_details
- https://www.kiplinger.com/529-plans
- https://www.doughroller.net/education/complete-guide-529-plans
- https://www.irs.gov/publications/p970
- https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html
- https://www.investor.gov/introducti...alerts/alerts-bulletins/investor-bulletins-10
[These links are also now under Personal Finance in the secondary navigation menu near the top.]
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