Saving for Education
A Brief History
For several decades, American families have acknowledged both the value of an education and the escalating price of college tuition. Education is integral to the success of our children and grandchildren, and while paying for college could be one of the largest expenditures you will incur, it just might be the best investment you ever make. That is why it is important to start saving early, and a 529 plan is a great savings option to help you achieve your college savings goals.
Named after the section of the Internal Revenue Code that created them, 529 plans are designed specifically to save for college, offering various tax benefits and other important features such as estate planning and gifting benefits. It's important to remember that these and other benefits may be conditioned on meeting certain requirements.
Early pre-paid tuition plans set up by a few states
Congress enacts "Section 529" of IRS Code
Tax Relief Act passed – Education IRA (Coverdell Education Savings Account) established
Tax Relief Act passed – withdrawals made tax-free (with "Sunset" or expiring 2010 provision)