All Financial Wisdom
Section 529: College Savings Plan
Section 529 in IRS tax code is a tax-advantaged college savings plan. You can set aside money for your children’s future college expenses, and it will grow tax free until you withdraw it. It sounds like a good idea to provide your child with a future without student debt.
In President Obama’s most recent State of The Union address, he mentioned filling in the “loophole” since it wasn’t helping middle and low class families as it was intended to do. An interesting point to make, is that President Obama and his wife made a huge jumbo contribution in 2007 for his two daughter’s 529 plans [Forbes].
Being responsible enough to put aside money and designate it for college expenses is a very tough decision. If you wanted to withdraw it for another purpose, you are heavily taxed on it. I would think, only the most comfortable and financial stable people would be able to contribute to such an account. They are the ones that have the money and have the knowledge to take advantage of such an account.
What do you think?