Demystifying Planning & Paying for College: A MoneyZen Conversation with Wealth Advisor David Ressner

Demystify planning for college costs: Manisha Thakor and David Ressner discuss saving for college, financial aid, calculating costs and even how to identify the right (priced) college.

Manisha Thakor is the Director of Wealth Strategies for Women at the BAM Alliance.

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Saving for College With a 529 Plan

529 Plan Basics

A 529 plan is similar to a Roth IRA in that you contribute after-tax dollars that grow tax free. Earnings from the plan can be withdrawn free of federal taxes for qualified college expenses.

Each state has its own plan, but you are not required to use the 529 offered by your state of residence. You can open a 529 account in any state. However, this does not mean the student (beneficiary) must choose a college in the state where the 529 was established. For example, a plan owner can live in Illinois, open a 529 account in Missouri and use the account to pay for the expenses of a private college on the East Coast.