education funding for great grandchild
My husband and I have a new great granddaughter. We would like to start/contribute to a college fund for her. We are in our mid 80’s, so unlikely to be around when she is college age. Our son and his wife are in their early 60’s. If they set up a fund, we could contribute to it. What would you suggest as a way to put money away for her future?Thank you for any advice. We read your column every Sunday in the Virginian Pilot.
Terry Says
The best thing you can do is set up a 529 College Savings plan account — in the name of the parents of the child. You can actually use any state’s plan — though some states give a state tax deduction for a limited amount of contributions. But you’ll want to make sure your state (or their state of residence) has a highly rated plan.
Read this to see how 529 plans work: https://www.terrysavage.com/the-gift-of-college-529-plans/
You don’t have to be an investment expert. Simply give the child’s age, and let them do the choosing in an “age-based” plan.
Then check out every state’s 529 plan rating here: https://www.savingforcollege.com/529-plan-ratings
If your state, or the parents’ state doesn’t have a great rating, I’d recommend using the Vanguard 529 plan, since it really doesn’t matter which plan you use — as long as it is highly rated. All will let your money grow tax-free for college.
