When you’re a kid, the last thing you think about is how you’re going to be able to afford college. Your parents, however, like have this going in the back of their minds from the time you’re a very small child. College is expensive, and the sad truth is that it’s just going to get more expensive as time passes. How, though, do you save up for college when you’re not even sure how much you’re going to have to spend, and when, at the same time, you are penalized for saving too much money?
Student Savings
If you’re trying to save for a student who is going to go to college, you may want to invest in a student savings account. A student savings account is an account that allows you to save money for your child, and if you get a special account, called a 529 Education Plan Account, you can save a great deal of money without being penalized by the government for it.
A 529 is based under the tuition program under Section 529 of the Internal Revenue Service. This program offers tax-advantaged savings for parents and college students. Any citizen can open the account and can put a great deal of money into the account without being penalized or taxed. In most cases, you can put in up to $24,000 a year (for married couples) or over $60,000 for five years as a single person ($120,000 for married couples) without having to pay the federal gift tax, which can save you thousands of dollars that your child can use for college.
While you’re not getting taxed on these funds, you’re also gaining money. Many banks offer a great rate of return on these types of student savings accounts, allowing you to earn as much as thousands of dollars a year on the money you have stashed away in their bank, making it easier to afford college than you would ever think possible.
Many parents who invest in the student savings account find that they’re able to write a check for their student’s tuition and room and board without having to blink an eye, making it a very sound investment for the future for both you, and your child, and one that is helpful in a number of different ways.
Student Savings
If you’re trying to save for a student who is going to go to college, you may want to invest in a student savings account. A student savings account is an account that allows you to save money for your child, and if you get a special account, called a 529 Education Plan Account, you can save a great deal of money without being penalized by the government for it.
A 529 is based under the tuition program under Section 529 of the Internal Revenue Service. This program offers tax-advantaged savings for parents and college students. Any citizen can open the account and can put a great deal of money into the account without being penalized or taxed. In most cases, you can put in up to $24,000 a year (for married couples) or over $60,000 for five years as a single person ($120,000 for married couples) without having to pay the federal gift tax, which can save you thousands of dollars that your child can use for college.
While you’re not getting taxed on these funds, you’re also gaining money. Many banks offer a great rate of return on these types of student savings accounts, allowing you to earn as much as thousands of dollars a year on the money you have stashed away in their bank, making it easier to afford college than you would ever think possible.
Many parents who invest in the student savings account find that they’re able to write a check for their student’s tuition and room and board without having to blink an eye, making it a very sound investment for the future for both you, and your child, and one that is helpful in a number of different ways.
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