Tag Archive: 401k

Save for College: Are 529 Plans the Solution?

One of the biggest hurdles to early retirement for parents is helping cover the cost of their children’s college.  The prevailing wisdom in many circles is to set aside funds in a 529 account.  For those not familiar with 529s, a 529 plan account is a tax-advantaged savings account designed to save money towards future education expenses. Advantages There are two main advantages to 529 savings plans.  The first is that any funds that are used to cover qualified education expenses are exempt from federal income taxes.  This can be a significant reduction in tax liability depending on the amount that has been saved in the account.  The second advantage is that many states provide tax deductions or credits for residents.  This can reduce the…
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