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Saving money for college is important, however you should know
that saving for your retirement is even more important. When
your children go to college they will have different sources
of income as opposed to when you reach your days post
retirement. It is important to never sacrifice your savings
put away for retirement.
Tuition is on the rise faster than inflation therefore, having
a portfolio geared toward the stock market is one of the
better ways to establish savings for the long run. As time
goes on and your child approaches college age, you will be
able to switch more money into
bonds and cash and shelter your
returns. The gap between tuition bills and savings can be
bridged with the use of state, federal, private grants, and
loans. If you invest into mutual funds, you will be taken care
of by a professional who will be responsible over watching
your funds so that you don't have to watch or pay attention to
the market yourself.
An additional way of saving money for college involves 529
savings plans because they offer very good tax breaks. Tax
breaks are almost as good as grants and may allow you to take
2 federal tax credits, the lifetime learning credit and hope
credit during the years you pay for your tuition. If your
income happens to be a bit too high to qualify, you may
qualify for a deduction related to high education which will
be in effect through the year 2005. When the time comes to
repay, a lender can be flexible and offer ways to cut down on
costs after graduation to begin paying off your student loans.
Interest up to $2,500 can also be deducted annually if your
gross income is under $65,000 if you are single or less than
$130,000 if you are filing jointly while married. This
deduction can be taken for the rest of the loan life.
For more information on ways of saving money for college,
visit:
Source: http://money.cnn.com/ |
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