“Do you know anything about 529 plans?” This is a question that arises quite often in my business. My answer is typically, “Yes, but a 529 plan may or may not be the best fit for you and your family.” “But, we want to save for our kid’s college,” is the response I get. And yes, 529 plans are one of many ways to save for college. There are several questions to think about as the college saving decision is made. Below are a few:
· How much of a tax advantage do I want?
· How much flexibility for the use of funds do I want?
· How long before my kids go to college?
· Do I want one account for each child or one account that covers all children?
· Do I want the money to be available for higher education only or is secondary education a concern?
· How do I want saving for college to potentially affect my ability to receive financial aid?
· How much control do I want over the money?
· How much would I like to contribute per child?
These are 8 of the many questions that need to be answered before a decision can be made on what type of account will work best for a particular situation as it pertains to saving for college. Make sure you meet with your financial advisor to help walk you through the process of choosing the right college savings strategy.