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Submitted by: Amy Rose Herrick
Amy's skills combine Tax Planning, Income structuring, Cash Flow, Divorce Settlements, Debt configuration, Estate Plans, Portfolio Planning and Distribution Alternatives. She assisted an institutional investor base from '86-90, then focused her practice in '91 to the present for individuals and small business exclusively. Amy holds various professional licensing in several states. She has provided planning advice to multiple media outlets including Newsweek. Interviews are available.
Ups and downs of college savings
Published Wednesday, June 18, 2008
Amy Rose Herrick, an investment adviser representative with Woodbury Financial Services Inc., offers the following consumer tip for surviving a shaky economy:
If you are thinking about investing in a 529 plan instead of taxable investments for college savings, consider these pros and cons.
Pros:
• You won't pay income taxes on investment gains if the money is used for college expenses, such as tuition, room, board and books. Withdrawals that are tax-free.
• There are no income limits, and 529s can be set up by anyone, including grandparents, family friends, aunts, uncles, etc.
• You can save $200,000 or more per child over your lifetime and up to $60,000 per individual, or a total of $120,000 per couple in one year without triggering a gift tax, as long as you don't make another contribution for five years.
• There are no age limits for the beneficiary of a 529 plan.
• In Kansas, there are additional tax savings on your income tax for contributions.
Cons:
• You don't get to choose individual stocks or mutual funds in which to invest. The individual state plans decide which investment options are offered.
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