Parents are absolutely responsible for the welfare of their children. Since they were brought into the world, they need to make sure that all their needs are properly taken care of. One of the greatest of those needs is education. All children need to receive an adequate education, and it is the responsibility of parents to ensure that their children receive the best education they can afford.
Although school education is free in most regions, university education can be prohibitively expensive. Unless parents plan ahead and start saving for their children’s higher education, it would be extremely difficult to pay for their college education out of pocket. In fact, most parents should start saving for their children’s higher education from the time their children are in elementary school.
There are a number of savings plans specifically designed for children’s higher education. One of them is the “529 college savings plan.” It’s a very flexible plan that helps parents save money for their children’s future, or even someone else’s.
There are also a number of other benefits that the 529 college savings plan offers. Earnings from the plan are exempt from federal income tax, as long as the money is used solely for educational expenses. Most states also offer tax breaks for the plan.
The money in the account is completely under the control of the parents and the child has no control over it. Therefore, it can never be misused at any time. If the child does not want to continue with higher education, the amount can be transferred to benefit another person in the family.
If someone wants to contribute to the savings account, they can, and there are virtually no restrictions on who can contribute money. And the money can also be used at any time after the child grows up. There are virtually no age restrictions on when funds must be used for the child’s education.
There are also other financial vehicles that parents can use to save money for their children’s future education. But this is one of the most attractive plans that comes with a number of benefits and features.
Of course, parents can also save money on their own without investing it in any financial vehicle. But it’s always wise to invest it in a plan that pays dividends and offers tax benefits for investing.