Why you should start a 529 Plan for your 2 year-old child

Start the 15-year clock! Open a 529 plan for each child today. It doesn’t take thousands of dollars or in some cases even hundreds of dollars-maybe as little as $100 to open this savings account. By opening it now the parent can start the 15-year savings clock so that all earnings in the account are sheltered from income tax, so that the kids have a special savings account to put that extra money in, and so that we can transfer $35,000 from that account in 15 years to a Roth IRA under the newest rules.
Although the 529 may only be used for higher education costs, by now having the ability to transfer a nice chunk to a Roth IRA in 15 years the child has all of the benefits of a Roth IRA begin at an early age, while also having the ability to access any of it for education without tax or penalty.

Georgia allows a state tax deduction to Mom or Dad if they put money in their child’s account! If you are wondering where to start a savings plan for your child, or where to put birthday or holiday gift money, this is it! Even better, because the account owner is usually a parent or grandparent the child cannot access the money when they turn 18 or 21-the child is just the beneficiary and cannot get to the cash. The account owner(s) are normally a parent who can change the beneficiary once per year.