| The costs of a college education continue to | | | | |
| rise like a hot air balloon and many fear | | | | 529 accounts work because either your |
| that they will soon be beyond their reach. | | | | investment earnings will grow to meet the |
| Some experts have estimated that the cost of | | | | higher costs of future education or you will |
| an average four year program at a public | | | | have already prepaid for your child's college |
| college or university may cost as much as | | | | education. Most people favor the savings |
| $100, 000.00 in fifteen years from now. | | | | account option because they feel that is most |
| That's a lot of money, regardless of your | | | | attractive but it really depends on your |
| current income. | | | | individual finances and your risk tolerance. |
| | | | |
| The good news is that you can play now to | | | | A 529 plan is a state-sponsored investment |
| avoid that super-hit later on. You may not be | | | | program. That means that your state sets up |
| able to control the costs of a college | | | | the plan with an asset management company and |
| education, but you can find ways to lesson | | | | you open a 529 account with that asset |
| that blow. One way is through a 529 college | | | | management company that must live with the |
| education savings plan and even if your child | | | | state's desired plan features. You still own |
| does not decide to go to university later on | | | | the account and you designate a child as the |
| you can roll it over to someone else in the | | | | beneficiary of that account. All of your |
| family who does. | | | | dealings will be directly with the asset |
| | | | management company that has been designated |
| A 529 plan is named after its section number | | | | to manage the 529 plan for your state. |
| in the IRS code is a savings plan for college | | | | |
| education and when you open an account you | | | | Depending on the state you live in there will |
| have a number of options to choose from. | | | | be variances in some of the procedures that |
| | | | you have to follow and conditions on the |
| Those options include prepaying tuition at a | | | | asset management companies investment |
| qualified educational institution at today's | | | | strategies. Most plans are very similar but |
| tuition rates or you can save money in a | | | | there are no restrictions on which state you |
| tax-deferred account that can only be used to | | | | choose to invest in so it may be worth your |
| pay for education at future tuition rates. | | | | while to check around. |