Choosing a College Savings Plan

It’s critical to start saving early for college. Fortunately, there are a variety of tax-advantaged plans that can make saving college funds a bit more tolerable. One of these plans is the Section 529. Michigan has two Section 529 plans: the MET and the MESP.

Michigan was the first state to offer a prepaid tuition plan back in 1988 — the Michigan Education Trust (MET). The MET helped thousands of families accumulate education funds, but those funds could only be used for tuition at a Michigan college or university.

In 2000, Michigan implemented the Michigan Education Savings Program (MESP), which is a savings-type of 529 plan. Funds in this account can be used for qualified higher education costs (tuition and room/board) at any eligible educational institution in the United States and even some overseas. Even though you may question your child’s decision to become a Buckeye over a Wolverine or Spartan, you may use the funds for this out-of-state university.

For more information on the MESP, visitwww.misaves.comand for the MET, visitwww.met4kid.com.

Since there are a variety of tax-advantaged options, consult with your financial or tax advisor for additional information before implementing a college-funding plan.

– Timothy Wyman, CFP®, JD

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