Wednesday, February 4, 2009

Invest for College

By Jennifer Ng

College costs have been increasing steadily every year. Private colleges now costs up to $40,000 to $50,000. Take for example; Syracuse University now costs over $40,000. Therefore, the earlier you start saving for college the better. A great way to do this is by investing. According to CNN, stocks are the best choice because you can gain more returns by putting more money into bonds and cash.
A top investment plan includes the 529. A 529 savings plan is “a tax-favored investment account specifically designed to help cover college costs.” Everyone is eligible to contribute to a 529 and this plan is offered through individual states. This is a great plan because they offer tax breaks. CNN states, “Qualified withdrawals are now free of federal tax and most plans let you save between $100,000 and $270,000 per beneficiary. Plus, there are no income limitations or age restrictions, which means you can start a 529 no matter how much you make or how old your beneficiary is.”
Another smart choice is the Coverdell Education Savings Accounts. This saving plan is a “A tax-favored investment account designed to help cover any qualified educational expense, including, for example, the cost of a private secondary school.” Unlike the 529s though, they offer a much lower contribution.

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