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3 Tips For a 529 College Savings Plan

Jul 27, 2012

If you are already saving for college in a 529 college savings plan then you are ahead of most people. The majority of family's do not or can not invest because they just do not have the money according to a Sallie Mae survey. 

The 529 plan offers so many positive benefits like tax-free growth. If you are already using a 529 plan for college savings then you will definitely reap the benefits when your child enters college.

I have found 3 ways you can maximize your savings. These ideas will help you tweak your accounts for a better return.

1. Vanguard 529 Plan. If you do not have an idea where to invest in a 529 plan choosing a 529 plan that has Vanguard investments would be to your benefit. Even if you have to have an out of state plan Vanguard is the superior choice. Vanguard is known for there low expense costs and their variety of funds.

2. Open a separate account for each parent. When choosing a Vanguard run 529 plan you are limited to having only 5 funds in the account. When using two accounts you can have more diversification. By opening two accounts for one child you get to hold 10 investments. There is also a limit of one trade per year. Having two accounts allows you to make adjustments at two points in the year.

3. When making your monthly contribution to your Vanguard 529 account you get to choose which investment gets the new money. This allows you to self direct your asset allocation to your own liking. By choosing different investment choices you have the flexibility to shape you diversification. Doing this will keep your chosen asset allocation in balance every month.

You have the best vehicle at your finger tips to help you invest for college in the most economical way. Your 529 plan will allow you to have the necessary money ready for your child's education. The more money you have in these accounts the less you will be dependent on borrowed money.



Got further questions? Catch me on twitter and DM me @529SavingsPlans or e-mail me at 529CollegePlans at Gmail.com. Want to be heard? Leave a reader comment below.

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