A great way to ensure that your children can get a guaranteed college education is to benefit from a 529 college savings plan. Unless you are hoping for your growing student to get a scholarship or attend a school like the ones at Online University or perhaps a technical college, you are going to need a solid education investment. If you value your children's future then you should plan ahead for their education. Learn here about the two different types of 529 plans and their other benefits.

The Two Types of 529 Plans

There are two 529 plans available to you. Each has its own set of merits and can be used in most colleges in the United States and in some schools overseas as well.

The first type of a 529 plan is the prepaid college plan. This has the advantage of the tuition being locked at the amount in the time of purchase of the plan. In other words you will be paying the future college tuition of your children using the rates the college uses today (excluding room and board).

The state will guarantee whatever amount you contribute so your money will surely be safe. The only problem with this plan is that there is a limit to the amount that you can contribute which depends on the beneficiary's age; the beneficiary should also reside in the state the plan originated from.

The other form of a 529 plan is the college savings plan. Unlike the prepaid plan, the price of the tuition is not locked and it is not guaranteed by the state. However you can use the amount included in the plan for all the expenses accumulated during the beneficiary's stay in college.

You can also put in a larger amount of money in a 529 college savings plan regardless of the beneficiary's age and what's more the beneficiary does not need to live in the same state to use it.

Other Benefits of a 529 College Savings Plan

Besides securing the educational future of your children, there are several other benefits in getting a 529 college plan. One is about how you can use it as a tax shelter for your money.

Any amount of money placed in a 529 college savings plan becomes tax-free instantly, making it an ideal way for you to distribute money to your loved ones without having to pay any taxes.

There is a stipulation though that the money should only be used for educational purposes; if any amount is withdrawn from the plan which is not used for the beneficiary's college education it will be subject to 10% tax.

(Please note that taxes may change over time. Consult a certified tax advisor before making any decisions that can have major tax implications.)

Maybe you have maxed out on your college savings plans. Or maybe you are looking for other investment strategies to grow your savings to be able to afford college. Then click here to read more about how to grow your savings sure and simple with long-term trend signals.

Planning for the future of your children is your responsibility as a parent. Ensure that their future is bright by getting them a 529 college savings plan and by setting an example of how to invest your savings wisely.