The most complex issues in personal finance will not be covered here on a regular basis both because there are other blogs that do it to death and because it’s not what I set out to do with this site. However, with twin 12 year old girls and a three year old boy, we have decided to read up on how these work. We have them on all three kids but haven’t bothered to learn anything about them other than they present tax advantages both on the front end and back end. When we started these plans, we did it because it seemed like a responsible thing to do.
Rather than attempting to sound like an expert, I am going to tell you that a 529 plan is a good thing for a number of reasons. Not only are your contributions tax deductible up to a certain amount, but your earnings are not taxed unless you violate the rules (not using withdrawals for qualified college expenses) and there is great flexibility in how the proceeds are used when withdrawn. It’s essentially a Roth IRA for your kids’ educations.
Please read some of my links below to educate yourself about the 529. Below are some helpful links in learning about 529 plans:
Does Your 529 Plan Make the Grade? (Business Week article)
[...] So, What is a 529 College Savings Plan Anyway? « The Crafty DollarSo, What is a 529 College Savings Plan Anyway? The most complex issues in personal finance will not be covered here on a regular basis both because there are other blogs that do it to death and because it’s not what I set out to do with … read more… [...]