Monday, October 23, 2006

More on saving for college

If you're a parent, the article in the Sunday Oct. 22 Business section of The Gazette on 529 college savings plans is a must read. Here's a few points that didn't make it in the story:

  • The 529 does not hurt a child’s chance at financial aid. A report by Fidelity Investments said parental assets are given the lowest weight on an aid application. Most of what is considered is the child’s income and assets. The 529 in the parent’s name isn’t the child’s asset.
  • Grandparents can open a 529 for a grandchild (or any child for that matter). This makes the 529 a great gift that grandparents can give year after year through contributions. The kids won't be as excited to get it now, but they will thank you later. And it lasts longer than toys.
  • If you open a Colorado 529, you can link it with the Upromise service that automatically adds a percentage of certain purchases to your 529. For example, buy a box of Kleenex and get 1% of the cost credited to your 529. Here are the eligible products. You can also get a Upromise credit card and have 1% of your purchases credited to your 529. Be aware, however, that you may be able to save more money by not buying these name-brand products, even with the credit. Buy if they are products you prefer or happen to be the best buy. Upromise will monitor your credit card for credits due. You can also link it to your Safeway or King Soopers card to get automatic credits.

If you have any other questions on the 529, leave a comment here.

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