If you have kids at home who are studying it is the duty of the parents to ensure they get good education, clean manners and habits. As far as higher education is concerned to be frank with you it is very costly, most of the parents struggle to pay the fees , they take loans and further complicate their financial situation. It is necessary for parents to financially plan to meet the challenges after say 10 years or 15 years from now. There are many programs available for students one of which is 529 Plan.
What is 529 plan?
This plan is a state sponsored program specifically started for students enabling parents to save money for their kids higher education / college education, it is basically a savings for future education of your kids and it is popularly known as Qualified Tution plan ( QTP).
Key benefits of 529 plan
- You are exempted from tax for all the savings you make through this 529 plan.
- You can ask your relative , or friends to help the fund going on, there is no necessity that the parents should put the money into it anyone can contribute to the savings plan.
- If in some cases your child got a scholarship or something which defuse the savings plan you can get back the savings money and also if the money is not used you have the option to divert the savings to your another child in the family.
Types of 529 Plans
- Savings 529 Plan – Which will grow according to the market situation.
- Prepaid 529 Plan – This plan enables you to purchase tuition credits in advance in current rate, this will automatically increase and you can use it after 10 years also.
This article is for information purposes only.
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