The right college savings account will not only help you finance your child’s education; it will serve as an enticing benefit for your medical practice employees. While there are many different types of college savings plans available today, a 529 plan is the go-to choice for many parents and practice owners in the medical profession. A 529 plan is a tax-advantageous way to save money for the education of the beneficiary of your choice, usually your child. Offering this plan to your employees helps them save for their children’s education and allows you, as their employer, to contribute to those savings and earn tax incentives.
529 plans are offered on a per-state basis. Some states even offer grants and scholarships based on your 529 investment. There are two different options for starting a 529 plan for your beneficiary.
- The first is a prepaid plan, which allows you to purchase college credits at the current market rate and save them for the future.
- The second is a savings plan that relies on mutual funds to determine how much money can be saved in the allotted time period.
Both types of plans are tax-exempt for the investor. Choosing the right college savings plan is important to the financial health of your family and your medical practice. Be sure to consult your financial planner to see which 529 options are available in your state.
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