A number of points about 529 plans
DEAR HARRY: We have a daughter entering a top-notch high school. We have every expectation that she'll go to one of the elite colleges. The problem is that we have very little saved for those stiff tuitions. We have heard of 529 savings plans, but we're not sure what they cover and which ones do well on the investing end. Must we stick with Pennsylvania's plan, or can we go elsewhere? Can you shed some light on whether 529s are a good idea?
WHAT HARRY SAYS: I like these plans for many reasons in addition to their help in paying for those all-important college years. These plans can accumulate money tax-free, and withdrawals are also tax-free if used for college purposes such as tuition, books and fees. More than 10,000 American schools are eligible, including trade schools. The plans give you control over the assets, and you need not restrict yourself to your home state's 529. If your child doesn't need the money, it can be transferred to another beneficiary. I suggest that you search for a plan that allows you to invest in Fidelity, T. Rowe Price or Vanguard funds. These are low-cost and high-performing funds.
Don't lose sight of the colleges that have a "grant-only, no-loan plan" for tuition. The leader in this program is our own University of Pennsylvania.
Email Harry Gross at harrygrossDN@gmail.com, or write to him at Daily News, 801 Market St., Philadelphia, Pa. 19107. Harry urges all his readers to give blood. Contact the American Red Cross at 800-Red-Cross.