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Tips for Parents Saving for College

A 529 account and/or a Florida Pre-paid account is a no brainer.  A 529 account is NEVER taxed.  As long as you use the money for educational expenses, the gains from bond interest, stock dividends and stock appreciation is never taxed.  You can easily set up an account through Vanguard or Fidelity.  The 2019 changes for maximum contributions are located at the Vanguard link.

The definition of educational purposes is fairly broad and includes room and board, fees, books, supplies, equipment, computer hardware and software, and internet access and related services.

Also, parents can now use a 529 for private K-12.

A Florida Pre-paid account is also exempt from claims of creditors, similar to a 529 account.

Leaving money in a bank account earmarked for children which earns less than 1% is just not sound financial planning for growth or creditor protection purposes.

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