Thumbs Up: Section 529 Tips

Physician's Money Digest, October15 2004, Volume 11, Issue 19

When you're saving for yourchild's college education, astate-sponsored 529 plan is a goodchoice. Deposits are tax-free and so arewithdrawals, if the money is used oncollege expenses. But the sheer numberof 529 plans makes choosing one harder.College-planning gurus suggest thatyou look at your own state's 529 first tosee if you get a break on your statetaxes by putting your money into thatplan. Some states even match part ofyour contributions. Don't stop there,though. Look at plans from otherstates, with a focus on investmentoptions and expenses. The more investmentchoices, the better, and the lowerthe expenses, the more cash you'll havefor tuition, especially if college is morethan 10 years away. For a comparisonof state plans and links to individual529s, go to www.collegesavings.org.