Save for College with a 529 College Savings Plan
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With the ever-increasing costs of college education, it is never too early to start your child’s college education fund. There are many options out there that you can choose from, but one is actually developed by the Internal Revenue Service.
Section 529 is the Internal Revenue Code for a state-sponsored, tax-deferred investment program. This plan is easy to enroll in and to maintain as well.
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In this plan, you make contributions whenever you like, or can set up automatic deductions from your paycheck, TransUnion explains. Most states allow up to $200,000 or more. Your money will be invested in stock mutual funds, bond mutual funds, and money markets. You can have your money invested conservatively, moderately, or aggressively, depending on what your level of risk-taking is.
You may also want to consider the age of your child when you set up your account.
If you get a somewhat late start in setting up your 529 accounts, you may want to invest in the moderate or aggressive level; whereas if you are investing for your newborn, you may feel more comfortable in conservative to moderate level.
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Another note is that the funds from this account will be professionally managed, so you can be as much involved in the investment process as you would like to be.
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