College Savings Accounts For Kids
February 17th, 2007
Question: I want to start saving for my kids college, do I need a financial advisor to find the best plan for me?
I also want to create an investment account to make my savings money more productive, Im not sure how to start and a financial advisor charges fees that I would rather not pay if I can do it on my own, any advice?
Answer: If you are saving for college expenses, you should take advantage of federal tax breaks aimed at families saving and paying for college. These include the following:
Qualified Tuition Programs (529 plans)—Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs.
Coverdell Education Savings Accounts— Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs. May also be withdrawn tax-free for primary and secondary school expenses.
You can read about these at
http://www.savingforcollege.com/
If you are comfortable with the idea of investing in mutual funds, you can invest on your own. If you have not invested in mutual funds before, you need to read up on this. Some people feel comfortable doing it on their own, others need a financial advisor to hold their hand. I don’t know enough about you to say what type of person you are. Below is one link about mutual funds.
http://finance.yahoo.com/funds/mutual_funds_101
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