|
|
| www.1001TopWords.com |
|
|
College Savings Plans ? Are They The Best Choice For My Child?
College Savings Plans ? are they the best choice for my child? College Savings Plans, also called Section 529 plans, are one of the best ways to save for college because they offer: - Tax advantages - A variety of investment options - Flexible contribution options - Parental control - Little impact on eligibility for need-based financial aid Tax advantages Investments in 529 plans are usually exempt from federal taxes. Earnings are tax-deferred and are not subject to capital gains taxes. Redemptions are also exempt from federal income tax if they are used to pay for tuition, room and board, fees, books, supplies, or equipment. Most states also offer tax advantages, at least if you enroll in the plan for your own state. In addition, contributions may be deductible on your state income tax. In addition to these income tax benefits, College Savings plans can be a valuable estate planning tool. The accelerated gift option allows you to average gifts over $11,000 per beneficiary over a five year period with no federal gift tax. This means you can contribute up to $55,000 per beneficiary in one year with no gift tax. Contributions are immediately removed from the donor's gross taxable estate (and included in the estate of the beneficiary). Investment options Most states offer three or more investment options ranging from conservative to aggressive. One is usually an age-based portfolio that invests mainly in stocks while a child is young, then shifts to bonds and money-market funds as college years come closer. 529 plans are managed by experienced investment companies, such as Vanguard, Fidelity, and TIAA-CREF. Contribution options Anyone can contribute money on behalf of a beneficiary, allowing friends and relatives to give the gift of education. In addition, the minimum investment amount required to open an account is usually lower than mutual funds require, making section 529 plans affordable for lower income families. States set their own contribution limits for college savings plans. Most states base their limit on an estimate of the amount of money needed for seven years of post-secondary education. Limits range from $146,000 to $305,000. In addition, most states allow you to regularly transfer funds from your checking or savings account to your 529 plans. Some states even let you set up payroll deductions. Parental control The money in a College Savings Plan is controlled by the account owner, not the child. So if the child decides to not go to college, they do not have access to the funds. Instead, the account owner can get his or her money back (with income taxes and a 10% penalty owed on earnings) or transfer the funds to another family member. Impact on eligibility for need-based financial aid College savings plans have a low impact on financial aid eligibility because they are considered an asset of the account owner (usually the parent), rather than the student. Choosing a plan Most states have their own College Savings Plans, but you do not have to enroll in the plan in your state. Look first at the plans in your own state, especially if they offer tax advantages. Other factors to consider as you compare state plans are expenses and investing options. Prepaid tuition plans Another type of Section 529 plan are the prepaid tuition plans. Prepaid tuition plans are guaranteed to increase in value at the same rate as college tuition. So, if you purchase shares worth one semester of tuition at a state college, those shares will always be worth one semester of tuition, even 10 years later when tuition rates have doubled. These plans offer basically the same tax and contribution benefits as College Saving plans, and they are guaranteed by the government. However, because prepaid tuition plans are considered a resource, they reduce need-based financial aid dollar for dollar. Therefore, families that expect to qualify for need-based financial aid should avoid prepaid tuition plans and invest in college savings plans instead. Another alternative is to roll prepaid tuition plan funds over into the state's 529 college savings plan before college begins. There are many advantages to college savings plans; however, there are many ways a parent can help a student pay for a college education. Make sure to research as many avenues as possible to make the most informed decision on how to pay for school, and you could end up with the optimal college funding solution. This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about how to get College Savings Plans at http://www.NextStudent.com . My goal is to help every student succeed - education is one of the most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.
|
|
|
|
RELATED ARTICLES
Oil and Gasoline Price Uncertainties The Light Crude Continuous Contract hit an all-time high at $70.85 a barrel, while Unleaded Gasoline Futures spiked 50% or $1 a gallon on Tuesday. However, oil closed the week at $67.57 a barrel, while gasoline finished the week up 15%. There's still uncertainty over the extent of oil and gasoline disruptions in the Gulf, over the next few weeks or months, caused by hurricane Katrina. However, there are many forces keeping a lid on oil and gasoline prices. Stock Market Money Management Skills Let's start by saying: You can't be afraid to take a loss. The investors that are the most successful in the stock market are the people who are willing to lose money. Stock Market Leaders and Laggards Leaders are stocks that breakout immediately when the market confirms a new rally. In the first several weeks, strong stocks with leadership ability will breakout on volume above their 50-day average. Some of these stocks will breakout on the largest volume ever. Typically, newer stocks that have come public in the past few years will have the most strength for sizable gains. How to Terror-Proof Your Money "To drift is to be in hell, to be in heaven is to steer." -GeorgeBernard Shaw Use of a Franchise Business as a Family Tax Planning Strategy Suggesting the use of a franchise business as a vehicle for family estate and tax planning. Specifically using as an example, The Car Wash Guys, a portable car wash franchise, where you will be purchasing a completely designed and outfitted car wash truck and the right to develop a specific city or regional area with out of pocket start-up costs between $25-50,000. There are many other types of mobile franchise busiensses in the same general price range due to competitive market components. Real Estate Clubs Hot Among Investors Six or seven years ago, the stock market was booming, Internet companies that no one had ever heard of were valued at billions of dollars, and anyone and everyone was investing their money in tech stocks. Then, in 2000, the stock market crashed, the Internet companies closed their doors, investors lost trillions of dollars, and life went back to normal, more or less. Five years later, tech stocks are nowhere near their 2000 peaks, but investors are salivating again. This time, they're putting their money in real estate, and they're forming real estate clubs to help them achieve greater success. Press Release Scams and Successes: Reading Between the Lines Press releases are a means through which companies can keep the public up to date regarding their recent affairs. It is the duty of every public company to keep its investors and indirectly potential investors aware of what is going on in the company. It should not be forgotten, however, that it is in the ultimate interest of the company for the price of the stock to increase. Consequently, companies are increasingly selective about what and how information is presented in such releases. Your mother always told you, "If it sounds too good to be true, then it probably is." That popular adage holds particularly true with regard to penny stock companies' press releases. Certainly all press releases are optimistic; companies would not release them otherwise. But when looking to invest in a company, be aware of overly ambitious, optimistic, and unsubstantiated press releases. A company that has had annual revenues of 10 and 11 million for the past two years and that claims that the coming year will bring revenues of 40 to 50 million, better have a darn good reason. Examining press releases by breaking down the argument into its underlying logic is an excellent way of uncovering reasoning that has been intentionally muddled to appear better than it is. For example, if a company says that its software sales increased 300% over the past year but do not indicate what percentage of their total revenue was composed of software sales, be suspicious. If a company does not lay out a detailed plan explaining how they will make money and increase earnings, it is likely that their only source of revenue is selling valueless shares to sucker investors. Selecting Rules for Investing and Trading There are three important differences between investing and trading. Overlooking them can lead to confusion. A beginning trader, for example, may use the terms interchangeably and misapply their rules with mixed and unrepeatable results. Investing and trading become more effective when their differences are clearly recognized. An investor's goal is to take long term ownership of an instrument with a high level of confidence that it will continually increase in value. A trader buys and sells to capitalize on short term relative changes in value with a somewhat lower level of confidence. Goals, time frame and levels of confidence can be used to outline two completely different sets of rules. This will not be an exhaustive discussion of those rules but is intended to highlight some important practical implications of their differences. Long term investing is discussed first followed by short term trading. Effective Advice For A New Generation of Investors CATCHING A FALLING KNIFE CYA You all know what CYA stands for. Of course,Cover Your Assets. Creating Wealth by Gearing Up Gearing is where you borrow money to invest. As already mentioned, it is best to clear all your debt before looking at investment. However, there will arise situations where the investment is a good one and it is necessary to borrow a small amount to make the deal work. The borrowing may be for property or shares. Well Managed Investing Risks Bring Rewards! "Risk comes from not knowing what you're doing!" Warren Buffett (1930 - ) How Do I Start Investing Online and What Are Some Basic Tips? If you are new to investing online, don't put your entire life savings into an online account. Start with a smaller sum, which will be easier to handle and keep track of. Once you feel confident, you can then decide to add more money to your investing online account. Five Sure Fire Way to Secure Your Financial Future "You can be poor when you're young, but you can't be poor when you're old." That was the tag line used some years ago in a financial services television commercial. Investing 101: Risk Terminology - BETA About thirty years ago, statisticians armed with all of theirstatistical theories began to confront the financial markets. Ahandful of useful tools emerged that the average investor shouldbe familiar with when they look to purchase stocks. Holy Grail Investments Every year I go to the Money Show inOrlando, Florida. Thousands attend. It is mostlyan older crowd with the youngsters about 40years of age. I have been saying for years thatuntil you have lost enough money trying to makea fortune you will not become serious aboutinvesting. The under 40's are shooting for themoon and it has finally dawned on the over 40's(maybe it's the over 50's) that they must find abetter way to get rich. Larry, Moe and Curley, Investment Brokers Larry, Moe and Curley were sitting in their favorite restaurant just off Wall Street having their usual 3 martini lunch and were discussing the day's events and their client portfolios. Can Your Annuity Do This? Okay, so I can tell you I have sat in front of countless numbers of people who have made mistakes when purchasing and owning annuities. And I have visited people who wish they never got involved in an annuity. And I have seen people who say that their annuity is their worst nightmare...So what is it that makes the annuity such a bad thing for some people and such a great vehicle for others??? Well I am about to tell you...and it all goes back to the annuity owners biggest MISTAKE. Yes, not mistakes but mistake. Looking For a Safe Investment? Try a Certificate of Deposit If you are looking for a safe investment and you have between $100 -$1,000 to invest, you should consider a certificate of deposit or CD. When purchased through a bank, CD's are federally insured up to $100,000. Pros & Cons of Investing in Bonds What are Bonds?
|
| © Athifea Distribution LLC - 2013 |
