Investing Like A Pro
Free Investment Information, Articles!
Better Sales Article:
College Savings Plans - Are They The Best Choice For My Child?
College Savings Plans - are they the best choice for my child?
College Savings Plans, also called Section 529 plans, are one of the best ways to save for college because they offer:
- Tax advantages
- A variety of investment options
- Flexible contribution options
- Parental control
- Little impact on eligibility for need-based financial aid
Tax advantages
Investments in 529 plans are usually exempt from federal taxes. Earnings are tax-deferred and are not subject to capital gains taxes. Redemptions are also exempt from federal income tax if they are used to pay for tuition, room and board, fees, books, supplies, or equipment.
Most states also offer tax advantages, at least if you enroll in the plan for your own state. In addition, contributions may be deductible on your state income tax.
In addition to these income tax benefits, College Savings plans can be a valuable estate planning tool. The accelerated gift option allows you to average gifts over $11,000 per beneficiary over a five year period with no federal gift tax. This means you can contribute up to $55,000 per beneficiary in one year with no gift tax. Contributions are immediately removed from the donor's gross taxable estate (and included in the estate of the beneficiary).
Investment options
Most states offer three or more investment options ranging from conservative to aggressive. One is usually an age-based portfolio that invests mainly in stocks while a child is young, then shifts to bonds and money-market funds as college years come closer. 529 plans are managed by experienced investment companies, such as Vanguard, Fidelity, and TIAA-CREF.
Contribution options
Anyone can contribute money on behalf of a beneficiary, allowing friends and relatives to give the gift of education. In addition, the minimum investment amount required to open an account is usually lower than mutual funds require, making section 529 plans affordable for lower income families.
States set their own contribution limits for college savings plans. Most states base their limit on an estimate of the amount of money needed for seven years of post-secondary education. Limits range from $146,000 to $305,000.
In addition, most states allow you to regularly transfer funds from your checking or savings account to your 529 plans. Some states even let you set up payroll deductions.
Parental control
The money in a College Savings Plan is controlled by the account owner, not the child. So if the child decides to not go to college, they do not have access to the funds. Instead, the account owner can get his or her money back (with income taxes and a 10% penalty owed on earnings) or transfer the funds to another family member.
Impact on eligibility for need-based financial aid
College savings plans have a low impact on financial aid eligibility because they are considered an asset of the account owner (usually the parent), rather than the student.
Choosing a plan
Most states have their own College Savings Plans, but you do not have to enroll in the plan in your state. Look first at the plans in your own state, especially if they offer tax advantages. Other factors to consider as you compare state plans are expenses and investing options.
Prepaid tuition plans
Another type of Section 529 plan are the prepaid tuition plans. Prepaid tuition plans are guaranteed to increase in value at the same rate as college tuition. So, if you purchase shares worth one semester of tuition at a state college, those shares will always be worth one semester of tuition, even 10 years later when tuition rates have doubled. These plans offer basically the same tax and contribution benefits as College Saving plans, and they are guaranteed by the government. However, because prepaid tuition plans are considered a resource, they reduce need-based financial aid dollar for dollar. Therefore, families that expect to qualify for need-based financial aid should avoid prepaid tuition plans and invest in college savings plans instead. Another alternative is to roll prepaid tuition plan funds over into the state's 529 college savings plan before college begins.
There are many advantages to college savings plans; however, there are many ways a parent can help a student pay for a college education. Make sure to research as many avenues as possible to make the most informed decision on how to pay for school, and you could end up with the optimal college funding solution.
This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about how to get College Savings Plans at http://www.NextStudent.com .
My goal is to help every student succeed - education is one of the most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.
Related Investing News and Articles From ezinearticles.com
Making money using long term growth has always been a popular path to financial success. The concern of not only the individual but business has always been to find ways to not only ensure money for short term benefits but to also find innovative ways to make money over the long haul of time. There are so many ways to make money it becomes a major decision on exactly what is the correct choice for people and businesses.
Investing in Costa Rica can be a gold mine...or it can be a disaster. If you are serious about investing in various forms of activities in Costa Rica which are primarily dependent upon the "baby boomers" settling here...continue reading. Costa Rica, because of the government's laissez faire attitude toward businesses opens up a literal "wild west" when it comes to investing. Read the article, do more research, and then come visit us.
Ever since the 1970's the United States dollar has been following a consistent trend of 5-7 year cycles of up and down trends. In late 2001, early 2002, its value reached its high point when measured against the Euro. Since that time, it has been in a decline for nearly 6 years, just as the trend has been for over 30 years. With this in mind, it would suggest that the dollars time to rise in value again should be coming soon.
Balanced investing strategy is the most widely followed portfolio management strategy. It combines the merits of aggressive and defensive investment strategies. Read on to check if the strategy can work for you.
I love investing in precious metals, especially Silver. Right now for the cost of a fast food lunch for two, you can purchase a beautiful, enduring, appreciating Silver Eagle coin. What if you decided to stop buying the unnecessary doo-dads, and developed a habit of using that money to buy appreciating assets. Wealth creation involves developing a prosperity mindset. It's not just about pinching pennies to save money, it's about knowing how to purchase appreciating assets. Silver is an affordable way to start saving real money and accumulating real wealth.
You Can Own This Website!
This website is an example of a new product called article site manager developed especially for people who wish to own Adsense sites or sites to promote their own websites and products but do not have the technical ability to own or maintain a website.
Details about this site and other article sites in different categories can be found at the link below. Prices start at $259 for a complete website like this!
Related Investing Articles:
FOREX, trading foreign currency
FOREX trading is all about trading foreign currency, stocks, and similar type of products. The currency of one country is weighed against the currency of another country to determine value. The value of that foreign currency is taken into consideration when trading stocks on the FOREX markets. Most countries have control over the value of that countries value, involving the currency, or money. Those who are often involved in the FOREX markets include banks, large businesses, governments, and financial institutions.
In less than four years, the price of oil has risen about 300%, or over $50 a barrel. The Light Crude Continuous Contract (of oil futures) hit an all-time high at $67.80 a barrel Friday, and closed the week at $67.40 a barrel. Persistently high oil prices will eventually slow economic growth, which in turn will cause oil prices to fall, ceritus paribus.
The different types of stock are what confuse most first time investors. That confusion causes people to turn away from the stock market altogether, or to make unwise investments. If you are going to play the stock market, you must know what types of stock are available and what it all means!
It use to be said that once a company was de-listed from the NASDAQ it was the kiss of death, not so any more. With Sarbanes Oxley and all the insane reporting requirements it might save your company from incessant lawsuits from investors and the government regulators who are out to destroy free enterprise. Many small NASQAQ companies have spent over $100,000 initially to set up the controls for accounting compliance of Sarbanes Oxley and now the ongoing scrutiny for transparency runs a good 1-3% of gross sales. But that is not the kicker; the real problem is when company executives make decisions for the regulator over sight compliance and what is best to keep the company out of trouble or from receiving a letter from Elliot Spitzer or the SEC. Once that happens the stock price tumbles and once in the sites of a regulator they are going to have to find something to prove self worth, even if they have to lie a little or fudge their investigation to make something up. Which is all to common as any insider will tell you.
Is a SEP Plan Right For Your Business
A SEP is a special type of IRA. Under a SEP plan the employer creates an IRA account for each eligible employee, hence the name SEP-IRA. A SEP is funded solely with employer contributions. Employees do not make contributions to their SEP-IRA retirement account. Any money that goes into a SEP automatically belongs to the employee. Thus, the employee has the right to take his SEP IRA account money with him whenever he stops working for the company.