The 10 biggest 529 plans for the fourth quarter of 2011 are ranked by asset size

My Comments: A 529 Plan is an IRS approved idea that allows you to set aside after-tax money in a special account where it will hopefully grow. Then, when you withdraw the money to pay for college education approved expenses, you don’t have to pay income tax on the earnings.

In my judgement, this is really another scam promoted by Wall Street to get their hands on your money. College expenses are generally not tax deductible, so putting after-tax money into a special account by itself is no big deal. Then you take all the risk that the money will grow and not shrink in value, and if there is growth, then you don’t have to treat that gain as taxable income. Always providing you spend it on qualified expenses.

If, for any reason, the person named as beneficiary of the plan, presumably your child, does not go to college, then you can transfer it to another person in the family going to college. Otherwise, the gain becomes taxable, along with a 10% penalty.

How do you like the rules so far?

I’ve created a link to the article that caused me to write this post in the first place. But when you’ve read it, if you haven’t become discouraged, I urge you to click in the image that accompanies this post and watch the short video I created. There’s no reason for you to consider any other way of paying for a childs college education until you have exhausted the option from the Circle of Neighbors Foundation.