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SFC 101: Intro To College Savings - Lesson 2
Hello and welcome to Day 2 of Savingforcollege.com's special 5-day course on Section 529 college savings plans. Thank you for registering for this exclusive email event.
Today's lesson: 529 vs. Coverdell vs. UTMA vs. Everything Else
In yesterday’s lesson you learned how much you should be setting aside each month for your child’s college education. Today we cover the important topic of which 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 don’t have to choose just one option—many parents successfully incorporate two or more options into their college savings strategy.