PHOENIX — Your child may be young now, but someday they’ll be heading off to college. You probably need to start saving money now to pay for it.
Mike Sullivan of the Take Charge America Consumer Credit Counseling service is suggesting three plans that might help you save.
One is called the 529 plan, which allows you to save up tax free earnings for high learning.
“It can be mutual funds or CDs, whatever your state happens to offer,” Sullivan said. “You can contribute every year. In most states, including Arizona, you get some kind of a tax benefit for your donations.”
Sullivan said another savings plan is called Coverdell. It used to be called an education IRA.
“There’s a smaller limit as to how much you can put into a Coverdell,” Sullivan said. “But there’s also a little more flexibility even than a 529 plan. If you’re only saving small amounts, say a couple of thousand dollars a year, I personally think it’s just as good as a 529, maybe even a little bit better.”
The third savings plan is the Roth IRA.
“It’s not really a college savings vehicle, it’s a retirement savings vehicle,” Sullivan said. “But you can withdraw your contribution for higher education purposes without a penalty.”
When asked which plan he would personally choose, Sullivan said the 529 plan is the best for people who can sock money away for their kids’ college.
- Telecommuting: 5 tips to make it work for employers and employees
- See how top CFOs feel about economic growth in the Valley
- Migraine myths that keep patients from effective treatments
- Here’s why Gaydos went tankless with his water heater
- 12 things to watch before the Oscars
- Bocce ball and basketball: How you can help Arizona's Special Olympics athletes
- Tips on building the best wine room in Arizona
- Avoid the nightmare: 6 tips to choose a great contractor
- Breast cancer: Improved testing and treatments means more survivors
- Best and worst of Super Bowl commercials
- Failed back surgery: New hope for patients living in pain
- Ticking time bombs: Telltale signs your water heater is about to explode
- Reading glasses could be a thing of the past
- 6 cool ways teachers are using technology in the classroom
- Emerging tech jobs in Phoenix and how to get one in 2017
- 4 top treatments athletes use for pain
- Emergency! What to do when bathrooms flood
- Operation Santa Claus needs holiday help
- This college bowl season is likely to be epic
- Arizona kids in crisis: How you can help
- 11 holiday classics for the ultimate movie marathon
- New treatment offers hope for migraine sufferers
- 11 stadiums to watch your favorite football team
- Shopping for a TV? Best models for 2016
- The new beer pairing guide for holiday foods
- Avoid this holiday plumbing disaster in your home
- 7 tips to avoid holiday weight gain
- New treatments mean better prostate cancer survival rates
- 5 of the scariest things found in drains
- 6 tips to create the best family movie night