Just about everyone knows these days that student loan debt is a real crisis in this country. With well over $1 trillion owed, and a significant amount in default, today’s college graduates are struggling with a major burden to carry through life. But there is a way for you, as their parents, to ease that burden.
The federal tax code, under section 529, has created tax incentives for contributing to a college fund. Referred to commonly as a 529 Plan, it can help you save for your child’s education. Every dollar you save (and grows with your child) is a dollar they don’t have to borrow! So in this episode of the podcast, I talk about these plans, what they are, what the money can be spent on, and whether they are right for you.
In this episode you will learn:
- What a 529 College Savings Plan is.
- How contributing to one can give you a tax advantage
- What educational institutions are eligible to receive the funds when you start spending them
- Who the plan beneficiary can be (you might be surprised)
- What the money can be spent on tax free