We don’t want you stuck paying full freight for college in 10 or 15 years, so let’s explore that 529, shall we?
You may not know that...
There are two types of 529 plans: a pre-paid tuition plan and 529 savings plan. The pre-paid is what it sounds like: You pre-pay for junior's education at a state college, locked in at current prices. Downside: You can't transfer the money to another state.
The 529 savings plan is more flexible—you contribute now and can take the money to any college junior picks—but there's no guarantee his or her tuition will be covered. C'est la vie.
In many states you don't pay taxes on the money you save—and when you withdraw it to pay for an accredited institution, the funds are FREE from federal taxes. Read more on SavingforCollege.com.
Numbers vary whether your kids go state or private.
Four years of public university will cost about $100,000 in 15 years. You will need to make monthly contributions of $250 to meet this cost.
Four years of private university could cost $350,000 in 15 years. You will need to make monthly contributions of $900 to meet this cost.
Galia Gichon is the founder of Down-to-Earth Finance.
This article was also featured on Shecky's.