Welcome to SolidPlanning.com. Solid Planning is a site where our dreams, strategies, and hard work are combined to produce tangible results. On this site we will review books, tips, tricks, and strategies, looking for ways to build our plan to meet the 2009 goals posted in the far right column. As we make progress we'll bring you along with articles and stories on this site. We welcome your suggestions and feedback along our journey so please feel free to leave comments!

Jan 27, 2009

Prepaid Tuition

A prepaid tuition plan, or Section 529 plan, is an excellent vehicle for college savings. These plans are guaranteed to increase in value at the same rate as college tuition. Therefore parents can lock in tuition prices at today's rate with no risk to their principal. Many plans are guaranteed by the full faith and credit of the state. However these plans may require the account owner or the beneficiary be a state resident when the account is opened.

Anybody, not just parents, can contribute to a prepaid tuition plan. Prepaid tuition plans can be an excellent estate planning tool. Prepaid tuition plans are exempt from federal income tax, and may be exempt from state and local income taxes. In addition, some states offer a full or partial tax deduction for contributions to the state's plan.

Plans have annual enrollment deadlines to lock in the current year’s rates so interested individuals should be sure to remember the deadline as part of their planning process.

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