Saving For College

A college education is becoming more and more important in today’s world. The earlier you start saving for your child’s education, the better financial situation you can be in when it comes time to move them into their dorm. Using a 529 plan is one of the easiest ways to help prepare your finances for college tuition.

A 529 Plan is an educational savings plan that is operated by either an educational institution or state that is meant to help families set aside money for any college costs in the future. The money that is put into a 529 plan can be used to pay for expenses at any qualified college throughout the country. Typically, the state that your 529 plan was opened in will not have any effect on your choice of school. While almost every state offers a 529 plan, each state has the authority to decide what the plan will look like.

As an added benefit to a 529 plan, most plans will allow you to qualify for special tax credits, as long as the plan satisfies the right requirements. Many states also offer tax incentives to anyone who invests into the plan.

There are two main types of 529 plans, including:

• Prepaid plans – which allow you to prepay part or all of the costs of an in-state public college education. Prepaid plans can also be converted to use at out-of-state and private colleges.
• Savings plans – a savings 529 plan works a lot like a 401K by allowing you to invest your contributions in mutual funds or any other similar investments. There are several investments options that you can choose from with a savings 529 plan. Based on the option that you choose, the account will either increase or decrease.

For all of your insurance needs and to ensure that your 529 plan is protected, contact the insurance professionals at Martplan Insurance Agency in La Habra, California.