529 COllege Funds
I want to save money for my grandkids in college. I dont understand the benefits of a 529 plan that yields low % vs putting my RMDs or extra cash in a liquid checking/savings plan with Huntington Bank at 4.5%? I can just send them a check for tuition or supplies when I feel like it. What’s the tax benefit?
Terry Says
The tax benefit is that if you have young grandchildren and invest in stock funds over the next 15-18 years, they money will probably grow — and all come out tax-FREE if used to pay for college expenses.
If you want to save on your own, and then gift money to your grandchildren years down the road, that’s fine. Just don’t put the money in custodial accounts for them, or it will weigh heavily against the family if they happen to apply for financial aid.
