By Matthew S. Scott
Q: I am the 30-year-old father of an 11-year-old daughter and I haven’t started saving for her college education yet. I’ve heard of 529 plans, but where can I go to get more information about them?
–D. Singleton, New York
A: It’s not too late to begin putting money away for your daughter’s education, and a 529 plan is a good place to start. All 50 states now offer these state-sponsored college savings plans, which give you the ability to invest money in a pre-selected portfolio of stocks and bonds to put toward future educational expenses. The money saved can be used at any institution of higher learning for any expenses, including books and room and board. You can invest in any of the 50 plans, as each state has different investment options and terms. The plans provide tax-free savings on the interest earned as long as the money is used for education; some even offer a tax deduction for state residents. To get the best deal, make sure you avoid plans that charge high fees and be sure that the choices within the plan you choose are investments you would feel comfortable with outside the plan.
To find out more about 529 plans, go to www.savingforcollege.com, www.independent 529plan.org, www.morningstar.com/centers/ 529.html, or www.bankrate.com. You can also link your 529 plan to Upromise (www.upromise .com), which will rebate a percentage of your purchases with selected companies into your account.