Monday Morning Money Minute

Posted by Mark Matney of Holcomb Law, PC Newport News, VA
www.matneylawpllc.com
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Monday Morning Money Minute

Baby Step 5 – College Savings, Part Two. 529 Plan or Education Savings Account (ESA). I am using Paul Hogan’s pros and cons tonight for a quick overview.  529 Plans: No age limit for using the money, Only for college expenses, No income restrictions, Annual contributions limited to $14,000, Withdrawals tax free when used for college expenses, Non-qualified withdrawals taxed, Fewer investment options than ESA.  ESA: Must use the money by age 30, Can be used for primary and secondary education in addition to college expenses, Income restrictions apply, Annual contributions limited to $2,000 per year, Tax free withdrawals for education expenses, Non-qualified withdrawals taxed, Can invest in individual stocks, bonds or mutual funds.