Mazzante Fessler News Articles - Saving for College
Mazzante Fessler News Articles - If they gave out scholarships just for being wonderful, no doubt your child would have all the money she needs for college. But, in reality, the competition for scholarships (merit-based and need-based money you don’t have to pay back) and grants (need-based money you don’t have to pay back) is fierce, so you’re better off not relying on them as a source of income. “Not unless your kid is in the sixth grade and is seven feet already and can dunk the basketball — or plays Carnegie Hall,” says Joseph Hurley, founder of the financial-information website Savingforcollege.com. While you might consider using retirement funds for your children’s education, think carefully about that before forgoing plans geared specifically for college, you cannot easily borrow from your 401(k), and you might have to pay income tax on money you take out of an IRA prematurely. So shoulder the burden of college bills by putting money in one (or several) of the following three most popular plans.
529 Plans
Named after the Internal Revenue Code Section 529, 529s are state-run, tax-advantaged college savings accounts. At least one — or, in most cases, two — are operated by every state. They come in two varieties: a prepaid tuition plan and a savings plan — both tax-free when you withdraw the money for college. Neither 529 plan limits how much you can contribute annually, although they both have an overall limit, which can be as much as $300,000 per beneficiary. And the money is tax-free when you use it for education (but be warned: Tax laws can change).
Keep in mind that if you don’t use the money for college, there are penalties. “If you think there is a decent chance this money is not going to be used for college, then a 529 is probably not the vehicle for you,” says Kathy Kristof, author of Taming the Tuition Tiger: Getting the Money to Graduate With 529 Plans, Scholarships, Financial Aid and More. And each state (or the broker hired by the state to manage the plan) charges fees for opening and maintaining an account, as well as for many other investment activities. Sometimes those fees make the effort less worth your while.
Both Kristof and Hurley recommend that when you start shopping for a 529 (compare them all at Savingforcollege.com), you start by looking at your own state’s plans. You’re not required to enroll in your local option, and sometimes it’s not the best one out there. Investment options, fees, restrictions, and plan performance all vary, so do a little comparison shopping (in and out of state) before signing up.
Source: aol.com
About Lou Mazzante and Lee Fessler: Lou and Jean Mazzante lead MIMS. Lou and Jean Mazzante attribute their entrepreneurial success to hard work and being able to learn business proven leadership principles and mentorship. Lee and Linda Fessler lead Fessler International. Lee and Linda have created many successful business ventures.
529 Plans
Named after the Internal Revenue Code Section 529, 529s are state-run, tax-advantaged college savings accounts. At least one — or, in most cases, two — are operated by every state. They come in two varieties: a prepaid tuition plan and a savings plan — both tax-free when you withdraw the money for college. Neither 529 plan limits how much you can contribute annually, although they both have an overall limit, which can be as much as $300,000 per beneficiary. And the money is tax-free when you use it for education (but be warned: Tax laws can change).
Keep in mind that if you don’t use the money for college, there are penalties. “If you think there is a decent chance this money is not going to be used for college, then a 529 is probably not the vehicle for you,” says Kathy Kristof, author of Taming the Tuition Tiger: Getting the Money to Graduate With 529 Plans, Scholarships, Financial Aid and More. And each state (or the broker hired by the state to manage the plan) charges fees for opening and maintaining an account, as well as for many other investment activities. Sometimes those fees make the effort less worth your while.
Both Kristof and Hurley recommend that when you start shopping for a 529 (compare them all at Savingforcollege.com), you start by looking at your own state’s plans. You’re not required to enroll in your local option, and sometimes it’s not the best one out there. Investment options, fees, restrictions, and plan performance all vary, so do a little comparison shopping (in and out of state) before signing up.
Source: aol.com
About Lou Mazzante and Lee Fessler: Lou and Jean Mazzante lead MIMS. Lou and Jean Mazzante attribute their entrepreneurial success to hard work and being able to learn business proven leadership principles and mentorship. Lee and Linda Fessler lead Fessler International. Lee and Linda have created many successful business ventures.
posted by Billy Florence at 7:44 PM
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