529 College Plan, What's holding you back!

As much as $14,000 ($28,000 for married couples) can be contributed each year without gift-tax consequences as of 2013.

Under a special election, up to $70,000 ($140,000 for married couples) can be contributed at one time by accelerating five years’ worth of contributions (as gifts) as of 2013. This feature makes it an attractive estate planning tool for many. Account owner will not incur federal gift taxes as long as he/she does not make any additional gifts to the same designated beneficiary for four years after the year during which he/she makes the one-time gift. In order to do this, the account owner must make an election on a federal gift tax return for the year of the contribution. However, if the account owner elected to treat the gifts as having been made over a five-year period and dies before the end of the five-year period, the portion of the contribution allocable to the remaining years in the five-year period would be includable in computing the account owner’s gross estate for federal estate tax purposes. Account owners should see their tax advisors for more information regarding the gift and estate tax consequences of opening an account.

The U.S. Department of Agriculture estimates parents spend about $241,080 to raise a child to the age 17.¹ That’s roughly the cost of a 2013 Lamborghini Gallardo convertible.²

And if you’ve already traded that super-charged convertible dream for a minivan, you can expect your little one’s college education to cost as much as $200,000.³

But before you throw your hands up in the air and send junior out looking for a job, you might consider a few strategies to help you prepare for the cost of higher education.

First, take advantage of time.The time value of money is the concept that the money in your pocket today is worth more than the same amount will be worth tomorrow because it has more earning potential. If you put $100 a month toward your child’s college education, after 17 years’ time, you would have saved $20,400. But that same $100 a month would be worth over $32,000 if it had generate a 5% annual rate of return.⁴ The bottom line is, the earlier you start, the more time you give your money to grow.

http://www.mundofs.com/resource-center/investment/getting-a-head-start-on-college-savings

Any information provided has been prepared from sources believed to be reliable but its accuracy is not guaranteed. It does not constitute a recommendation of any kind.