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6 Reasons to Consider a 529 College Savings Plan

Tuesday, July 17, 2018

With the rising cost of a college education, it can be difficult to ensure your loved ones receive a quality educational experience.  Many try to set aside funds for future use, but those funds either become allocated to other expenditures or lose value over time by sitting in a low-interest savings account.

Enter the 529 savings plan.   These state-administered savings plans help you to allocate and grow funds to help cover qualified education expenses.  They provide helpful tax breaks and can even be connected to a tuition gifting service like giftofcollege.com so that family and friends can help you to alleviate some of the financial burden.

The key benefits of 529 plans include:

1) Getting into the habit of saving for college

2) Possibility of long-term returns on your investments

3) Enjoy tax breaks by taking advantage of in-state plans

4) Shift the plan beneficiary if a loved one’s college plans change

5) Enjoy favorable contribution limits on each plan

6) Limited effect on your financial aid offers from FAFSA

But the plan is not for everyone, as some may want a wider selection of investment options or need access to the college fund for more pressing financial concerns.

These plans can be a massive help in your journey to provide education for your loved ones, but it is a complex product that should be carefully considered.  (like all investment decisions)  To that end, MagnifyMoney has produced a free and comprehensive guide detailing the pros and cons of using a 529 plan.   The guide explains in detail what you should look for and avoid when evaluating a 529 savings plan and how you can best maximize its use.  

View the MagnifyMoney Guide to 529 College Savings Plans


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