How does one compare 529 plans? There are three things you absolutely must consider when looking for the right 529 savings plan for your child's education.
Saving for college is something most parents or grandparents begin thinking about shortly after the birth of their new child or grandchild.
College tuition and the expenses associated with college are always on the rise, so choosing the right 529 college plan is incredibly important.
Every state has their own rules when it comes 529 plans.
That's why it's incredibly important to choose a plan in a state that has less restrictive limits.
Many people mistakenly believe that they have to invest in a plan that is in their own state.
That's not the case.
You can invest in any state.
Be certain to look for a plan that allows you to change the beneficiary.
This is incredibly important.
If you invest in a 529 education savings plan for your son or daughter and then they decide not to go to college, you want to have the flexibility to name another individual as the beneficiary.
Remember that almost all 529 plans don't have age restrictions on beneficiaries, so if you have saved for years for your child and they decide to enter the work force, you can actually use the 529 to send yourself back to school if you want a new degree or you'd like to finish up your degree.
It's also a good idea to research the different investment choices available in 529 savings plans.
Some companies only offer standard, very safe investments that draw little interest.
You should look for a college 529 plan that has a wide range of mutual funds included in it.
Since you'll likely be investing a healthy amount of money into the plan it's imperative that it's earning as much money for you as possible.
You should always approach the purchase of a 529 plan as you would any other long term investment.
Don't rush in and certainly don't settle on the first choice that is presented to you.
Think twice before enlisting the help of a broker when it comes to buying a 529 plan.
It can be overwhelming to research all the available options and then make an informed decision about which 529 plan is right for you.
Using a broker means you'll have to pay fees.
These fees are in addition to the fees associated directly with the administration and set-up of the 529 savings plan.
Although a broker can be invaluable in terms of giving you experienced direction, if you take the time to learn all you can about what makes a good 529 plan you can find the right choice yourself.
Compare 529 plans and never rush into buying a one.
Look at all the available options and weigh the benefits and drawbacks of each and every plan.
This is a huge commitment and you want to ensure that you've made the right decision for the future college graduate in your life.