Related Financial Services - The following list of companies and services provide a wide variety of programs for consolidating debts and other financial services, such as a getting a home equity loan rate quote from a mortgage lender or investment management services.
- Get Personal Loan - Need a personal / unsecured loan for the consolidation of your credit card debt? This type credit is typically unsecured and does not require you to provide collateral in the form of your assets, such as your car or other personal assets.
- Debt Settlement Services - Too many bills to get a grip on? Review a list of available services and learn more about this service that uses debt negotiation to help people that need help with the elimination of their debts.
- Bill Consolidation - Too many credit card bills to make monthly payments on? Review this section for useful personal finance information and to compare a list of debt consolidation providers of loans and other related debt help services.
- Debt Management Services - Do you have too many monthly debts and other payments to manage? Visit this directory of web sites in order to review and compare different debt management services that may be able to offer help.
College Savings 101
by: Roy Bodinus for the Debt Consolidation Loan
Directory
Helping your children obtain a college education can be one of the most
rewarding experiences for a parent. It will also be one of the largest
expenditures.
Fortunately, families with a desire to save for college education have powerful
tax efficient tools at their disposal. This article will focus on two of the
more popular college savings vehicles: 529 plans and Coverdell Savings Accounts.
State-Sponsored 529 Plans:
529 plans have many benefits and are oftentimes the preferred college savings
vehicle. These plans allow relatives or friends to save money toward higher
education expenses for a child or any other loved one. You contribute money that
you have already paid tax on and the dollars grow tax deferred (that means the
IRS doesn’t take their cut of the growth each year). When the beneficiary incurs
qualified education expenses you can withdrawal the funds and pay no penalty and
no federal income tax on the earnings.
These plans have no income eligibility restrictions and have high lifetime
contribution limits. The lenient eligibility and contribution rules make 529
plans a viable college savings option for just about anyone. You can invest
through any plan, regardless of your state of residence. However, you may
receive additional tax benefits if you invest through the plan sponsored by the
state of your primary residence.
States work with large investment firms to manage their 529 plans. Each plan
offers a different selection of investment options. Many plans offer the
hands-off approach of age-based portfolios that automatically shift the
allocation of funds to become more conservative as the child gets older.
Coverdell Education Savings Accounts:
The tax benefits of Coverdell Education Savings Accounts are similar to those of
529 plans. You pay no tax on the earnings of your account as long as withdrawals
are used for qualified education expenses.
Coverdell accounts have several limitations that 529 plans are not subject to.
They have maximum annual contribution limits and eligibility income phase-outs.
Another difference between Coverdell accounts and 529 plans is that no
contributions may be made to a Coverdell account for a beneficiary that is older
than 18 years of age and all accumulated funds must be used by the time the
beneficiary reaches age 30. Because congress was not as friendly when
establishing Coverdell accounts, they oftentimes serve as a supplement to a 529
savings plan strategy.
Unlike 529 plans, Coverdell accounts provide the flexibility to invest in a
variety of investment vehicles, including stocks and bonds, whereas 529 plans
offer a set of professionally managed portfolios to choose from.
Helping a child achieve their aspirations in life is rewarding in many ways. You
will be able to maximize the help you provide them by making wise decisions on
how to save. Of course, some of the best words of advice we can give anyone is –
start saving early!
Even if your college savings goals seems overwhelming now, the proper planning
and savings can put those goals in reach.
Copyright © 2007 Northwest Advisory Group, Inc.
The views in this article do not necessarily reflect those of the Debt
Consolidation Loan Directory.
This article is for educational purposes only and is not a personal recomendation of any strategy or product. You should not make any changes to your financial situation based only on this article. It is advised that you consult a qualified advisor and tax professional to evaluate your situation before making any changes to your finances.