Audra Lowe: There is nothing the parents want more than to give your kids all the opportunity
in the world especially providing them with the great education and college
experience. Well that’s ideal but the cost of college might not be faceable for a lot
of people. Better’s career and finance expert Maribel Aber is here to help us
explain some college saving plan that are going to help all of us compare with
those scary future education in cost. Welcome back Maribel.
Maribel Aber: Great to be here.
Audra Lowe: Scary is word I think because a lot of parents know you are supposed to be saving
for your child education you should be but it’s tuff you’ve got the monthly
expenses going on and there is day to day things that you need to need to see for.
Bottom line is most people are saving enough right?
Maribel Aber: And where I’m going to get it, I mean let us looking at Sally and Charlotte came
up with something saying that, on average parenting families were saving maybe
$3000 each year. And we know the cost going are going up, cost I mean. I don’t
know if you know this but that’s—
Audra Lowe: Books and then board for the month.
Maribel Aber: I think it was College Board for the 2000 to 2009 school year that you know from
instate tuition for public you know college $18,000. If your at the state the same
school just on the average just under $30,000. I forget about private schools.
Audra Lowe: Right, right.
Maribel Aber: Private schools we’re talking about average of $37,000 so it’s a lot of money, the
good news is like in some people are saving but the better news is that the more
people here about things like 529 plans the more money that will be put away.
Audra Lowe: Right, okay so some people really then are on the right track to saving especially
with the 529 you just mentioned. Can you walk us through 529, people see it
everywhere but how do you exactly contribute to us and what is that mean?
Maribel Aber: Absolutely, you know my parents don’t know about the 529 you know I’ve talk to
a couple of people like studio who ever heard about the 529. Really it’s just the
internal revenue code 529 our people called it an education saving plan and all of
this as you contribute after tax dollars into the plan. So it’s great you’ve paid your
tax upfront okay your contributions and then any of the earnings that you make,
that’s tax free. Okay so it’s allow to compound right, tax free. You’re the parent
and you control the fund so that’s another good thing but here is the kicker if you
know your interest your dividend if you we’re drive them for things that are not
qualified higher education expenses then it’s taxable.
Audra Lowe: Okay you are on tax that what you put in but you maybe tax on the earnings that
you do take out so aside from you what you said; can you withdraw any of the
earnings at all?
Maribel Aber: As long as is it the qualified higher education expense and why I see that because
the whole purpose is of this plan is to be able to help fund for future college
expenses.
Audra Lowe: And what would be one of those expenses for example?
Maribel Aber: Tuition, woman board, and books those kinds of things but you are going to look
at the plan carefully to make sure you are not hit with those extra taxes.
Audra Lowe: Right and then the 529 plans are they easy to finds, I mean where you go to look
to get started with it?
Maribel Aber: They are offer by the state or broker while the broker then you maybe hit with the
annual distribution fee for the state you can just go online and make sure you have
all the beneficiary information that kind of thing. I would recommend going to
sites like collegesavings.com or savingforcollege.org those are the great sites to
look at. And the other things are you can shop around, there are no age or
residency requirement so one states plan might be better for you they might have
better option for you.
Audra Lowe: Okay so that’s something after look out for but definitely on the website they well
explain and break all down too.
Maribel Aber: Absolutely.
Audra Lowe: Good to have you back Maribel, thank you so much.
Maribel Aber: Great.
Audra Lowe: Thank you so much explaining at all and if you guys got question for Maribel you
can always email here at askmaribel@bettertv.com.
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