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Intro To College Savings - Lesson 2
Compare your options
Lesson 1 helped you figure out how much you should be setting aside each month for college, and now it's time to discuss the type of savings vehicle to use. After all, your choice of vehicle can make a significant difference in how much you end up with in your college savings account.
Several options exist, and each has its advantages and disadvantages. Of primary importance is the opportunity for investment earnings and the associated risk of loss. But beyond that aspect other considerations exist:
- federal and state income tax treatment, including potential tax penalties
- gift and estate tax treatment
- financial aid treatment
- control and revocability
- flexibility and ease of use
Remember, you donít have to choose just one optionómany parents successfully incorporate two or more options into their college savings strategy.