ARBOR WEALTH: Tuition hikes, the 529 Plan and Rascal Flatts

Published: Thursday, July 31, 2014 at 12:23 PM.

Simply put, the fees associated with many 529 plans sometimes offset the benefits of utilizing them.  While you forego tax deferred growth by utilizing a taxable brokerage account, you have a much wider selection of investment options without any restrictions on how the funds can be spent. Say little Johnny Angel becomes little Johnny Devil. You own the account and can use the funds for your own retirement needs or anything else, for that matter. Or say your child is an exceptional student and receives several scholarships. You can provide financial assistance as you see fit; perhaps send them on an interim trip to Europe or help them buy a car.  

Locking in tuition rates with a state sponsored pre-paid tuition program is usually a money saver.  Some 20 states currently offer such plans, usually under a 529 Plan umbrella. Florida ’s official website details four of these pre-paid tuition options, which include two 2-year plans and two 4-year plans. Start a pre-paid tuition plan while your child is a toddler, and you’ll save significant dollars by the time they start college.

College always costs so much more than we think it will. Children still need all the financial support they normally accept from you, in addition to their college expenses:  health and medical insurance, doctor visits, car payments, car insurance, clothes and more. 

Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121 —, a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.

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