BALTIMORE — The debacle with Maryland 529 is well documented.
Roughly 5,000 parents are hoping to get interest payments they believe are theirs while 529 says accounts are squared away.
So, what ways are the best to save for college?
Christine Buckley is still recommending one of the 529 plans known as the investment plan.
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“Think of it is something of like a 401k plan that you would contribute, there is a state tax benefit in some states and you would be able to grow those investments tax free if used for qualified education expenses,” said Buckley, Vice President and financial advisor at RBC Wealth Management.
She suggests this instead of the prepaid plan.
Buckley also recommends a coverdell account, which is similar to the 529 account.
“Little bit different in that you’re not tied to the investments offered by your 529 accounts, you self direct. However, with that you can only put in about $2,000 in your account annually,” Buckley added.
For those looking for a conservative approach Buckley recommends cash bonds.
When picking a savings plan, tax benefits are an important part.
It’s why Buckley likes the 529 plan.
“There is tax deferred growth, you’re not paying taxes on that especially if you’re paying larger contributions,” Buckley said.
She says it’s important to get started early, time is your friend.
“If you’re not investing you’re not earning. We’ve been taught from the very onset the longer you’re in the market the better returns,” Buckley explained.
For those entirely overwhelmed with investing for college, there are plenty of resources available online to help you understand.
If you need more help a financial planner can point you in the right direction.
