I just came across this website http://www.upromise.com that provides cash-back for college saving for your children. Apparently it gives you a percentage back on all credit card purchases, grocery store purchases, phone/cable bills etc that go into a 529 plan for college for your children.

Has anyone heard about this service or used it? I have a little one on the way and am just considering that getting started on college savings early is a good proposition.

Also, can someone tell me something about 529 plans in general. Are contributions tax-exempt or tax-deferred?? Also, can you have contributions taken out of your paycheck before taxes are withheld. What are the maximum annual contribution limits on a 529 for a working couple.

Any other college saving advice is greatly appreciated.

Thanks.

 

I will be keenly watching this thread since those are all great questions to know the answers to!!

 

Hi Moneeb-

I'm afraid that I'm only a little help here.

I have heard of Upromise. I know that its not a hoax, and that its a very real deal. I also know its a fairly recent development. My employer (Citigroup) is an active particpant and promoter of the program.

The money that you invest is all tax deferred and to a large extent you retain control over where you want the $ invested (obviously within the perameters of the program).

I don't know much about 529 accounts, you'll have to aske a CFP or your tax specialist there.

As a general comment, this is a great way to invest in your child's future. Its money you're already spending (on every day goods) so its not really making you dig any deeper. Moreover, once you sign up your almost locked into savings.

Sorry that I couldn't be of more assistance. I'm sure that the web page has some good info. and/or your CFP or CPA can help you more.

Good luck and again, congrat's on the soon to be new addition.

 

I don't know about this getting tax back thing that you are talking about, but I will tell you what my dad did.

In my state we have a program called Florida Prepaid college. My dad started paying for my college in small payments after i was born. Let me tell you this prepaid college is pretty cool has been very helpful. All i have to do is go show them a card that i have and the only thing i pay are my fees. I can go to any college in florida and they acknowledge this program. This program will cover tuition, and Dormitory semesters. I haven't moved away to college yet but I will be leaving home in about to years to go to University of Centeral Florida (UCF).

My dad paid for 120 tuition credit hours and 4 dormitory semesters. I think you can specify how huch tuition and dormitory you want the child to have.

You should look into your state and see if they have a similar program.

 

My education from 5yrs old through to University Graduation was free, the same for Health care and social security. As it is for all Australians, we may pay a little more than the U.S in taxes but the benefits are infinite.