Section 529 Savings Plans for Your Child’s Education

photo credit: kevindooley

Educational savings plans are a buzz word today. With soaring education costs, securing the child’s education expenses is a concern for every parent and every grandparent. Unfortunately when they look out for one, they get inundated with so many options that it is pretty easy for them to get lost in the maze. There has been a growing trend among people to go for the Section 529 savings plan while initiating a educational savings plan for their children or grandchildren. If you are one such confused grandparent, you too can look at this alternative.

However, understand that Section 529 education saving package is not 529 prepaid tuition packages. Though they look so similar they are quite different. So you must be clear about your goals and match them with which 529 plan suits you the most.

There are no restrictions on who can take a Section 529 Savings plan. You probably are one of those that have burnt their fingers in savings bonds that promised a lot and fell short and hence are eying these plans with skepticism. Your concerns are justified, but be rest assured, that Section 529 Savings plans are quite different. These plans assure your grandchildren economical support when they start their college. What’s more your finances in these plans are tax exempt meaning that the government would not eat into your gift to your grandchild.

Besides, you are allowed to start one plan for every child per state. This gives you the freedom to secure the education of not one, not two but all your grandkids. If you love them all equally, why should you prefer one over the other when it comes to securing the most important phase of their life.

Another important point to understand is that while saving for your child or grandchild, with the 529 Savings Plans you can actually decide who, how and for what your money can be used. This is very important because you want gift you children a safe and secure financial future, not excess money to squander and waste. These plans have provisions for you to decide on what are the expenses that can be provided for with your plan.

Typically, the biggest challenge for growing kids is their college and university expenses. The education costs are sky rocketing and this can deter or defer your grandkid’s desire to pursue a degree of his choice. This is precisely when you would like to come in and help your child make that decision. They would not only love you for your invaluable support in times of need but also be really grateful to you. In this competitive world you want to give the best education to your child so that he/she is always on top of the competition. Money should not a deterrent to that. With the 529 Savings Plans you can do just that.

Though the lifestyle keeps improving, financially times are bad and they can get worse. So if you have led a successful life and have a secured financial future, why not start on a second journey – the one for your child or grandchild.