Dear Al,
Any information you have regarding the pros and cons on a 529 College Savings Plan in comparison to any other savings plans would be appreciated. What’s your opinion?
Lisa
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Dear Lisa,
First, a few words for the benefit of readers not familiar with a “529 College Savings Plan.” It’s a qualified tuition program, mostly exempt from federal income taxation, under which a person purchases credits or makes contributions to an account for a future college student. It may be established and maintained by a state, state agency, or (beginning after 2001) an educational institution. There are certain restrictions, such as a 10% penalty for a distribution not used specifically for approved qualified higher education purposes (QHEFs). There are far more pros and cons than I could begin to enumerate here, so let me suggest that you visit Google or Yahoo, simply entering “529 college savings plan,” with various modifiers. There are a multitude of options and comments there. You can’t begin to read them all, but you’ll get a feel for it pretty quickly.
Al Jacobs
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AL JACOBS has been a professional investor for nearly four decades. His business experience ranges from real estate, mortgage, and securities investment to appraisal, civil engineering, and the operation of a private trust company. In addition to managing his investments on a day-to-day basis, he is a featured financial columnist for both online and print publications. He is the author of Nobody’s Fool: A Skeptic’s Guide to Prosperity. You’re invited to subscribe to his financial Newsletter, "On the Money Trail," at no cost or obligation by visiting www.onthemoneytrail.com.
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