Every parent dreams of giving his/her child the best education possible for it is only a sound education at the collegiate level that can assure a reasonably lucrative career for our children down the line. And, in these days when competition is so high, merely acquiring a Bachelor’s degree from just about any college is not adequate. However, many of the top league colleges also come with a very steep price tag, often way beyond the affordability of many. It is for this reason that it is of great importance to plan for your child’s educational needs well in advance.
Ideally, most investment consultants advise financial planning soon after the birth of the baby.
The 529 plans are long-term investment plans specifically focusing on those who wish to save money towards their children’s education, available exclusively to the Americans. Further, these plans come with an added tax advantage and permit savings from as less as US$25 per month up to a maximum of US$ 3, 00,000 for the duration of the plan.
While there are a large number of 529 plans available across the USA, it is strongly advisable to choose a plan that offers age-based fund management options so that your savings are less subject to volatile markets. Also, it is surely sensible to opt for those companies that offer 529 plans at lower commission and fund management fees. Ideally, direct sold 529 plans are the best when it comes to price, for the commission on these is the lowest.
When evaluating all available 529 plans, be it in your state or elsewhere, there are a few factors to keep in mind.
The first is the pricing. As far as possible, a plan that offers the lowest expense ratio, without your hard-earned savings going to middlemen is the most preferable. Also, go in for plans that offer maximum room for flexibility of amounts invested month on month.
Another point you must keep in mind is the credibility and financial standing of the company that is offering the plan. Also, keep yourself open to specific 529 plans announced by your state government, as these may influence your tax breaks.
The best savings plans are those that offer you a consistent and secure return on your investment without being subject to very significant market risks.
With these points in mind, do take the time to evaluate all available 529 plans and choose the one that best suits your financial capabilities and long-term requirements.