529 Plans | 529 Plan and College Savings

Posts Tagged ‘529 Plans’

April 12th, 2006

	Advantages:	Disadvantages:
Traditional IRA	Can change investments any time Can choose your own investments Contribution tax deferred	Contribution up to $3,000 year Withdrawals taxed Withdrawals not penalized if used for Higher education Cannot get diversified portfolio if small account
Roth IRA	Can change investments any time Can choose your own investments Withdrawals after establishing account for 5 years for higher education are not taxed	Contribution up to $3,000 year Contributions are taxed Cannot get diversified portfolio if small account Income restriction
529 Plans	No income restriction High maximum contribution and no contribution per year restriction Withdrawals for higher education are not taxed Can have a diversified portfolio even if the account is small	Limited pre-set portfolio Can only change option once a year Cannot be used for other reasons but education

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