529 College Plans No Longer Face Demise

Recently President Obama announced a plan to end the tax breaks associated with popular 529 college savings plans. According to the New York Times

The idea was to end one tax break…and plow that billion-dollar savings over 10 years into a far larger expansion of another tuition tax credit aimed more squarely at the middle class.

However, President Obama came under fire from House Speaker John Boehner, former Speaker Pelosi, states and other politicians for ending what is perceived as a middle class tax break.

The opposition has caused President Obama to drop the idea. According to a White House spokesperson

“Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support, as well as the president’s broader package of tax relief for child care and working families”

Obama Relents on Proposal to End ‘529’ College Savings Plans

 

College or Retirement?

by Mike Acciavatti

A recent article in U.S. News contained some disconcerting news:  college costs cause some people to choose retirement over an education for their children. The main problem is that parents do not want their children to be saddled with debut upon graduation due to the rising costs of higher education.  The article stipulates however that no matter how appealing a suggestion this may be parents SHOULD NOT risk their retirement future on college for their children.

The author states that the best strategy for dealing with college costs is to start saving early in a child’s life. The author states that simply putting the money away in a savings account is not necessarily the best option because it does not earn interest, causing it to not keep pace with rising inflation and rising costs of college.  Rather, the best way to save is to look at your state’s and school’s 529 or other savings plans.  By taking advantage of these programs the cost of college can be considerably less intimidating.

Every parent wants to give their child the best, and some would risk their own well being in retirement to ensure that. However, saving and investing, combined with scholarship and merit based financial aid, will ensure that both parents and children will have a safe financial future.