According to Savingforcollege.com, a 529 plan is a type of savings plan intended to help families save money for the cost of a higher education. The plan was named after Section 529 of the Internal Revenue Code and is operated by educational and state institutions.Continue Reading
Savingforcollege.com notes that a 529 plan from a specific state doesn't change if the student decides to go to an out-of-state college. It's recommended that students check to see if the schools they are thinking of attending are eligible under the rules of the 529 plan.
A state has the right to decide whether or not to have a 529 plan, how many plans to offer and what the features of the plans might be. According to Savingforcollege.com, a student and his family should examine and compare the benefits and the features of 529 plans before investing in them. Tax benefits and tax incentives associated with investing in a 529 plan apply not only to plan participants, but to the investors as well.
There are two different types of 529 plans: prepaid plans and saving plans. Prepaid plans allow families to prepay either all or a portion of the costs of attending a private or public college either in-state or out-of-state. The savings plan includes several investment options and works similarly to a 401K or IRA plan, notes Savingforcollege.com.Learn more about Financial Planning
Health savings accounts, or HSAs, are a type of flexible spending plan that allow individuals with a high-deductible medical plan to save money for medical expenses, advises Kiplinger. However, not all high-deductible health policies allow HSA accounts.Full Answer >
A health savings account is part of a health insurance plan where an individual can make monetary, tax-deductible contributions to a savings account and use the money later to pay for medical costs, according to CNN Money. Money not used in any given year rolls over to the next year.Full Answer >
According to The Mint, teaching kids about saving money includes setting savings goals, thinking about saving first rather than last and being smart when shopping. A good way to teach kids about savings goals is to help them buy big-ticket items. However, parents should set a goal that the child has to reach with his own money before the parents pay the rest.Full Answer >
Retirement savings formulas are based on the amount of money saved as a multiple of current income, according to Time. Different financial services firms use different multiples of final annual income for retirement savings. The general ballpark for comfortable retirement savings is eight to 18 times final annual income.Full Answer >