The CollegeInvest program is a way to save for college. If you’re a resident of Colorado, you can use the plan. You can also join the First Step program and contribute money to your account. However, you should consider the fees associated with the plan. Saving for college is an important decision that should be made early. The earlier you start saving for college, the sooner your money can start compounding.
CollegeInvest is a not-for-profit division of the Colorado Department of Higher Education. Its management is overseen by the Department of Higher Education, which appoints an advisory board. This board of directors is confirmed by the State Senate. As a state enterprise, CollegeInvest receives no taxpayer funding.
There are several types of 529 accounts. The most common plan is the 529 savings account. The account holder contributes money to the account and it is invested in one of a variety of mutual funds or other investment options. The account value increases over time depending on the performance of the chosen investments. Some 529 plans also offer target-date funds that automatically adjust assets over time as the beneficiary approaches college age.
The fees associated with 529 plans vary. Some require an application fee while others charge a monthly maintenance fee. The fees also depend on the type of investment option chosen. Fees can be higher if you purchase the plan through a broker. In addition to fees, there may be a small enrollment/application fee and on-going administrative fees.
The CollegeInvest Direct Portfolio College Savings Plan is offered by The Vanguard Group, the largest investment management firm in the world. It manages $1.3 trillion in US mutual fund assets. Vanguard’s proven investment strategies, low costs, and client-focused values work together to give Direct Portfolio account owners the best chance to save for higher education.
The tax benefits associated with 529 plans are attractive. A five-year investment can earn 15% tax-free earnings over a lifetime. These savings can also be withdrawn tax-free for qualified educational expenses. While the tax advantages associated with 529 plans make it a popular option, it is important to shop around for the best plan.
529 plans are investment accounts that allow you to save for college tuition. The money in the 529 plan will grow tax-free and will not affect your eligibility for federal financial aid. You can also use the 529 funds to pay for K-12 tuition or apprenticeship programs. You can even set up the account for yourself.