College Savings Plans Get Better Than Ever

College Savings Plans Get Better Than Ever!

Summary: What is now the best way to save for college expenses?

In my professional opinion, for most people, It's the College Savings Plans. They are now worth a very serious look!

Section of the Internal Revenue Code (the actual name) was put into place to encourage families to save and plan ahead for escalating higher educations costs. There are currently nearly million Plan accounts now with roughly $ Billion dollars invested.

Here are a few reasons that mo...

Plans,College Savings Plans,Paying for College,Saving for College,Education Planning

Article Body: What is now the best way to save for college expenses?

In my professional opinion, for most people, It's the College Savings Plans. They are now worth a very serious look!

Section of the Internal Revenue Code (the actual name) was put into place to encourage families to save and plan ahead for escalating higher educations costs. There are currently nearly million Plan accounts now with roughly $ Billion dollars invested.

Here are a few reasons that most people don't know that makes Plans more attractive than ever.

The Tax Increase and Protection Act of (which became law in ) extended the "kiddie tax" rules from age to , which made traditional savings accounts, also known as custodial accounts, much less appealing. That and other new laws made college savings plans MUCH more appealing.

With these plans, you could open an account and deposit money (NOT deductible on your federal tax return) and the money would grow tax-free. These deposits could be invested in money market, bond and stock mutual funds.

The Pension Protection Act of guarantees the tax-free withdrawals from the plans for higher education expenses will not fade away as they would prior to the PPA of .

That is a pretty good deal isn't it? But there are also estate planning and gift planning benefits that aren't available on any other college funding plan.

The tax code allows parents or grandparents to deposit up to $, in a plan for each child (married couple can deposit twice that amount), free of gift tax, due to the laws allowing up to years of gifting (up to $, per person per year) to be done in one fell swoop with these college saving plans. It is a great way of getting assets out of the wealthy estate for the benefit of heirs.

And it gets even better! And you know what else is great