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Education Savings: 529 vs Traditional Savings accounts

By Terry Savage on April 19, 2021 | College Savings / Student Loans

Terry, my son is 9 and my daughter is almost 14. We live in Illinois and have their savings in a traditional bank savings account. Considering my daughter is already in 7th grade, is it even worth opening a Vanguard or TD Ameritrade 529 account for her? You have recommended these in the past.

Terry Says

No. I haven’t recommended accounts for minors in many years! That’s because they weigh so heavily against the family in the college financial aid formula. Not to mention that at age 18 in Illinois the money becomes legally theirs!
Put he money in a 529 College Savings Account on their behalf. In Illinois go to www.BrightStart.com. You’ll get a tax deduction for the contribution — and the money will grow tax-free for college!

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