College Savings Plan

The news is full of articles today about the expense of college and how important it is to obtain a college education for many careers. You want the best for your child(ren), so you probably have given some thought to saving something to help them get a college education.

One of the best ways to save for college is called a "college savings program" or a "529 plan."

A college savings program is a program allowing an employee to put aside money in an investment account on a tax-favored basis for the employee's child(ren). The program will receive favorable federal and state tax benefits. Eligible employees who sign up for one of these programs may select the investment their state has chosen to make available to receive the benefits. Eligible employees may also elect to invest in investments made available in other states, but in that case, only the federal tax benefits are available because usually the employee's own state may tax the investment earnings as they are received.

In Wisconsin, the manager of the investments for the state is Wells Fargo and an array of investments is available in Wisconsin's program. Other states will have their own programs and select their own investment managers for residents of their state.

The scope of the programs and how they apply in each state is beyond the scope of this summary. However, employees should be aware of this valuable benefit and consider it as a way to accumulate funds for college education expenses for their child(ren).