529 Plan and College Savings

Question: What is the better method for saving for my two daughters college costs?

I have two daughter’s who are 3 and 1.5 years old. I’m thinking I need to start saving for college now. Which is better?

a) Saving money into an interest bearing savings account (approx. 4.5% APY).

b) Increasing the amount of money I save in my 401k, and then borrowing from that account when the time comes. Currently, I’m allowed to place up to 6% in the account and my company matches .5% for every 1%.

c) Saving money in a 529 Plan. I’m leary about this one because of the restrictions that most of these plans place on the owner (have to go to an in-state college, etc. etc.).

Thanks for your input!!

Answer: Most financial advisors will tell you to save first for your retirement. The main reason for this is because you can always borrow for college, however you can’t necessarily borrow for retirement. 529s are a fairly good investment vehicle and better that a savings account. With a savings account you are barely staying ahead of inflation, and actually falling behind in comparison to the rise in college costs. Check out this site, I use it and it is great, essentially it is a free way to Save For College without any additional expense to you. It has loan repayment and 529 options. http://www.Upromise.com

Astral Affichage Le Lait Colonnes Montréal

Related posts

• Sorry, no related posts at this time.