How to Save for College……and do it TAX-FREE!

As we all know, the world is a competitive place. No longer just a "good idea", a college education has become a necessity. The higher your education, the higher your income potential. For those 25-34 years of age with a high school diploma, the annual income is $20,000 compared with $40,000 for those with a bachelor's degree. For those 45-54 years of age with a high school diploma, the annual income is $30,000 compared with $60,000 for those with a bachelor's degree.

Regarding job security, the unemployment rate of high school graduates is 5% compared with 2.5% for college graduates according to the Statistical Abstract of the United States in 1996. Given the statistical information provided, it's important to remember that higher incomes and low unemployment numbers come with a daunting price tag. According to the College Board, an infant child born in 2002 who will be a freshman in college in 2019, the four-year cost at a public college will be $80,629 compared to $210,288 at a four-year private college.

The 529 plan is truly such a great way to save money for college. I would be remiss if I didn't share its benefits with you. Not sure what a 529 Plan is? By all means, read on. You'll definitely want to know as much as you possibly can about this high quality college-saving investment vehicle.

What is a 529 Plan?

A 529 Plan is a flexible college savings program that allows you to invest money for higher education on a tax-free basis. The funds may be used at any accredited college, university, or graduate school, as well as most community colleges and vocational-technical schools in the U.S. - and at many foreign institutions.

What Are the Advantages of Using a 529 Plan?

Tax-Free Growth
Earnings grow federal income tax-free. Qualified distributions
(used to pay qualified college costs for the plan beneficiary) are also tax-free.

High Contribution Limits, No Income Limitations
Currently, the highest contribution limit is $250,000. Check your plan, contribution limits may vary.

Estate and Gift Tax Exclusions
Contribute up to $50,000 in a year ($100,000 for married couples) for a plan beneficiary. Contributions are generally not included in your federal taxable estate.

Stay in Control
With a 529 Plan, you maintain total control - not the beneficiary.

Switch Your Investment Option at Will

The IRS is now allowing you to switch your 529 Plan investment options once per year. This a major benefit to you.

If giving your children or grandchildren the benefits of a higher education tax-free is important to you, then start a 529 Plan today.

BlackBostonOnline.com - It's your site.

Copyright © 2001 BayState Web Technologies, Inc.
All rights reserved. Republication or redistribution of BlackBostonOnline.com content is expressly prohibited without the prior written consent of BayState Web Technologies, Inc.