College Planning

The 529 Plan: Saving For College For Baby

With much to plan for with a new baby, saving for college is the furthest thing from your mind. Truth is, with the rising cost of college tuition it's never too soon. Consider a 529 Savings Plan.

529 Savings Plan - Preparing Baby for College

Before your baby comes into the world, you plan. From the crib to the clothes, to bottles and everything in between, you try your best to provide them with whatever they might need to get a good start in life. But did you know that you can also begin to plan ahead for their educational needs even before your baby is born? Setting up a 529 plan for college savings is another way you can help your baby get the head start he or she deserves in life.

What is a 529 Savings Plan?

The 529 plan is a savings plan that is specifically designed to help families set money aside for future education expenses. The 529 is a particular favorite with parents because it comes with tax breaks and benefits that you can read more about on IRS.gov. These plans are offered by almost every state and many educational institutions, and they can be used at any qualified college, university, vocational school, or postsecondary education institution in the nation. Talk to your local bank, credit union, or financial adviser about your options.

Getting started with a 529 plan early

Just because you can't set up a 529 college savings account before your baby has a Social Security number, doesn't mean you can't begin to set aside some money. For example, you could start a 529 for yourself, and then change the beneficiary at a later date. If you wait until after your baby is born to set up an account, you could be missing out on some tax benefits and growth.

Getting relatives to contribute to your baby's 529

If grandparents (or other relatives) are looking to contribute to your baby's education, let them know that you have a 529 set up. While savings bonds can be a good idea, politely encourage then to consider a contributing to your baby's 529 plan. You may be surprised by how many of your friends and family members will want to make a direct contribution to your baby's education.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

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Saving for College

Did you know you can start saving for your baby's college education even before they are born? Saving for college for baby can be easy with a 529 plan. For more information, visit the Protective Life Learning Center.

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