Benefits Of "Section 529" Savings Plans
States offer great ways to save for college costs. If you haven't yet heard about state "Section 529" savings plans, listen up. They're a great way for parents or grandparents to build a college fund.
These plans drip with income-tax and estate-tax breaks, and offer a potential for gain that older college plans can't touch. Many top plans are open to residents of any state.
529s were marketed by the states themselves or by two no-load mutual fund groups - Fidelity and TIAA-CREF - that some states have hired to manage their money. Brokers and financial planners who work for commissions weren't paid to sell 529s, so they steered your college money somewhere else.
Big brokerage firms are also in the game, selling state 529 plans to a national clientele. Merrill Lynch hitched up with Maine's NextGen program. Salomon Smith Barney has Colorado's Scholars Choice plan.
This creates an army of brokers prepared to tout this new form of investing to the public. Commercial sales should help get more people talking about 529s.
|
