Ask TheStreet
Picking which of these accounts to use (or whether you should use both) depends largely on the tax breaks your state will give you for having them. Ritter breaks it down: "If you are saving for college only and the 529 plan in your state gives you a tax benefit, you should start looking at your state's 529 plan. If it doesn't give you a deduction, see if you're eligible for an ESA. If you are eligible, consider the ESA, and put any savings over $2,000 per year in a 529 plan. In some places the benefit isn't that big or the plan has relatively high expenses... there might be other reasons not to choose it, but you should always consider your state's plan first."
Tactical Tips for College Savings |
and Uniform Gifts to Minors
Accounts (UGMA). The thing to remember about these is that they shouldn't be your first choice.
Traditionally, savings bonds and UGMAs have been popular because they were the only tax-advantaged options out there. Now specially designed accounts like 529 plans and ESAs are available, and they should be your pick for education savings.
College saving isn't purely the domain of parents, either. Savings bonds might have once been a great way for grandparents to chip in for the grandkids' education, but now it's important to remember that grandma and grandpa (and anyone) can set up a 529 plan with all the tax advantages that come with it.
One of the more attractive elements of the Roth IRA
is the fact that you can pay for education expenses without paying any penalties. Even so, that doesn't mean that the Roth IRA is a good savings solution for school. Since contributions to a Roth IRA are limited, using portions for education expenses is a great way to take a huge chunk out of the Roth's income-generating advantages. Just set up a 529 or ESA instead.
Again, no single stock is a good long-term play to totally pay for college. Taking the time to set up an education account for your child is a great way to ensure that they've got all the options in the world when it comes time to look for a college or university. By following the concepts above when you set one up, you'll be on the path to maximizing the bang for your academic buck.
Finding the Right 529 College Plan |
Don't wait too long to apply; many scholarships have deadlines in the next couple of months.
Government programs offer assistance to those overloaded with debt from college days.
Lower-than-expected returns and unexpected expenses could reduce your nest egg.
Need to get up to speed on how to save and invest for your retirement? Here's a running start.
Without a map of your dreams, you'll invest aimlessly. Here's how to write a personal financial mission statement that will help you stay focused.
Today is the last day to 'rearrange' your assets to qualify for the most aid.
Yahoo! is among the most searched stocks on TheStreet.com. Here's what Cramer had to say about the stock recently.
Catch up on his thinking on the hottest topics of the past week.
Investors will have to deal with a Fed meeting and another flood of earnings and economic data.
Ensco International and Echelon have the potential to move higher in coming days.
See who made what calls.
The addition of video is helping telecom companies compete against cable and satellite companies.
The June West Texas Intermediate contract reflects selling pressure ahead of Tuesday's expiration. But stocks in the sector are generally trading higher.
See who made what calls.
Keep on top of the market and the critical information you need to make more profitable investing decisions.
Sponsored by:

ACCESS REALMONEY


