College tuition and fees, which already can total over $100,000, continue to escalate at a rate of more than 5% per year. Assuming a 5% inflation rate, in 18 years a private university education will cost nearly $350,000. Todays parents realize that they need to start early in saving for their childrens education, and they need to take the effort seriously. Fortunately, more and more savings vehicles are becoming available to parents. Among the most promising are the 529 Qualified Tuition Plans and Coverdell Education Savings Accounts (formerly known as Education IRAs), both of which offer generous tax advantages over typical investment accounts. This book will help readers determine whether these college savings vehicles are right for them, when to start saving, how to choose the best plan(s) for their situation, and how much to save per year in order to have accumulated enough to send their kids to the type of college of their choice when the time comes.
Book Details:
- Author: Margaret A. Munro
- ISBN: 9781118068885
- Year Published: 2004
- Pages: 356
- BISAC: BUS050020, BUSINESS & ECONOMICS/Personal Finance / Investing
About the Book and Topic:
College tuition and fees, which already can total over $100,000, continue to escalate at a rate of more than 5% per year. Assuming a 5% inflation rate, in 18 years a private university education will cost nearly $350,000. Todays parents realize that they need to start early in saving for their childrens education, and they need to take the effort seriously. Fortunately, more and more savings vehicles are becoming available to parents. Among the most promising are the 529 Qualified Tuition Plans and Coverdell Education Savings Accounts (formerly known as Education IRAs), both of which offer generous tax advantages over typical investment accounts. This book will help readers determine whether these college savings vehicles are right for them, when to start saving, how to choose the best plan(s) for their situation, and how much to save per year in order to have accumulated enough to send their kids to the type of college of their choice when the time comes.
Some public opinion polls indicate that How will I be able to afford a college education for my children? has topped Will I have enough to live on after retirement? as the greatest financial concern of American families (www.collegesavings.org). Americans created more than 2 million tax-protected college savings plans in the last two and a half years, including half a million accounts in the first 3 months of 2002 alone. As of the end of March 2002, assets totaled $19 billion, up 300% since December 1999 (New York Times, 8/12/02). Cerulli Associates, a financial consulting firm in Boston, predicts that assets in 529 plans will grow to more than $50 billion by 2006 (New York Times, 1/13/02). 529 plans and Coverdell accounts shelter gains from federal and sometimes even state and local taxes, making them especially attractive investment options for college savings. Prior to 2002, contributions were taxed upon withdrawal, so people who had decided against these plans in the past have reason to reconsider them. All 50 states now offer 529 plans, which are open to anyone, regardless of income. Coverdell accounts are available to singles who make less than $110,000 per year or joint filers who make less than $220,000 per year. These plans can be very confusing to novice investors, making Dummies a natural provider of information on the topic. There are good plans and not-so-good plans (some with high fees that eat into earnings), and all plans involve lots of choices.
About the Author
Margaret A. Munro, EA, is an experienced professional counselor who helps families pick college savings plans based on their resources and objectives.