Many middle-class families in the United States face the challenge of the increased tuition fees. In the past 20 years show that the average cost of tuition and fees for private and public National Universities has for both in-state and out-of-state students. The average tuition fees at private National Universities have jumped 157 percent. That is why many individuals and families need a proper college savings account.
Today on the market, there are broad options of plans and accounts when it comes to retirement savings. One interesting option is the 529 plan. The 529 plan is a savings account specifically designed to help fund the costs for college. Investing in 529 college plan can be a great opportunity to save money for your child’s education. There are many benefits of having a 529 savings plan.
The first notable advantage is that the 529 account earns interest. The concept of 529 plans is set up like mutual funds. Specific states plans may have different regulations. Usually states invest those funds in stocks and bonds with the aim that there will be greater earnings compared to regular bank savings account. The majority of these plans provide a stability for your funds. Also, these plans tend to provide detailed information about where the plan is investing your money, the risk level and the statistical data about the success of the plan.
The second advantage is the fact that the 529 plans are tax-delayed investments
The 529 college savings plan provides you with the opportunity to have your withdrawals free of taxation. This can have a galvanizing effect on the overall financial stability. Also it can be a significant advantage that can help with the constantly increasing tuition fees. Yet the biggest benefit is maybe the fact that there is no obligation about the contributions. You can contribute as you wish. The 529 Savings plan provides the option to save money as much as you can or want. This is beneficial compared to other plans that include prepaid tuitions which have fixed contributions and year limits. In the same time, many 529 Savings plan have an automatic investment option. This allows the plan to withdraw funds each month from your accounts. Through this, you can save time and money.
The 529 plan also offers the option to transfer the funds from state to state. This also means that you will have the advantage to pick your college. Moreover the funds can be transferred from family member to family member. This is beneficial in cases where child decides not to go to college, the funds can be used toward another child’s tuition fees.
With the tuition fees constantly increasing, every parent will struggle to provide enough funds to provide good quality education to his or her children. Savings plans like the 529 account can provide a stable option that will ensure quality education to your children.