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