College Savings Plans for the Future - KCBD NewsChannel 11 Lubbock


College Savings Plans for the Future

Will your children or grandchildren be priced out of college by the time they are old enough to apply? Here are some plans so you get the most out of your money.

Conservative estimates say by the time today's two year-olds are ready for college, four years at a public university will reach $155,000 and more than double that for a private school.

Financial planner Alan Kahn says he advises parents to buy into 529 College Savings Plans, which remain tax-free. The smart money says you should begin investing in a 529 Plan when your children are young, but not all 529's are alike.

Earnings on all 529's are free of federal income taxes, but not necessarily state income taxes. If your state does not give you a tax break, you may want to purchase an out-of-state plan that performs better.

Also, some plans have higher fees and operating costs. In fact, you or other family members can pre-load the account with up to five years' worth of contributions to jump start growth.

For more information, you can (click here).

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