Something critical to consider for those who are either thinking about having children or already have them is how to fund their future education costs, which is rising so much faster than the average inflation rate it’s scary! Here’s how.
Now, there are very few investment vehicles that are truly tax free. The most common such as 401k, IRA and Roth IRA are only tax-deferred, which means you must eventually pay your taxes on any gains. Form 529, however, is tax-free (and that includes all growth), as long as the funds are used for education! Clearly, Form 529 is an ideal plan for tackling your child’s future education. In fact, Form 529 is great for anyone who knows that school is in the cards at some point in the next decade or more.
Case in point: That’s how long it took me to go back and do my Master’s degree. If only I knew then what I know now! I’d have put aside money into a Form 529 starting from when I was an undergrad freshman and would have had a nice little nest egg to pay for my tuition, books, etc. This is one of my biggest regrets and I sincerely do not want it to be yours. Please don’t make my mistake if you know that higher education costs is on the horizon for you or your children!
Let me help you navigate the often complex Form 529 rules to ensure you are never penalized by the IRS.
Call Mangus Today For A Free Consultation: (424) 291-2102
Marc Ang (Mangus) is a financial planner based in Claremont, CA, focused on spreading the gospel about responsible, educated and smart financial planning.