Tax Free Saving
Some families in this day and age have a fairly difficult time saving money so that there children will be able to attend college and hopefully therefore in turn make more money to provide for there own children. The new 529 plans allow people to set aside money for there children and as long as it is still in the plan it cannot be taxed until withdrawn. These plans are becoming a better , more effective, and cheaper way to set aside money to gain interest without being taxed. The money if not used can be passed down from one child to another with no penalty unless withdrawn. These plans can also be set up by family members for grandchildren and even niece's and nephew's. This plan should be a great way to get a hard start on paying for college with the average tuition raising twenty percent each year. Do you think this would be a good thing to invest your money in as a parent? Because for me it is sort of stupid question. It is definately a step in the right direction in helping middle class families.
1 comment:
This plan does sound like a real best kept secret when it comes to saving money. However, I think the flaw that currently exists in the plan is who it is available to. Right now, you must have money to participate in the 529 plan. If you already have a surplus of money you don’t need a way to get out of paying income taxes and you don’t really need to save money up for college tuitions. This is another case of making the rich richer, widening the economic differential in the country. Those controlling the plan seem to understand this and want to make it available to middle and lower class families. If this was possible, the plan would be a great attribute to families of all kinds. But, until then, it only caters to a select few who are already capable of sending their children to college.
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