529 Plan

  

All these numbered plans. Like... why couldn't they have just named it College Savings Plan 101? Or Bob's Zillion Dollars of Debt?

Anyway, they did name this tax-advantaged savings plan…and it basically allows parents who qualify to take contributions made into that 529 plan as tax deductions, so that it makes it easier for you to make it through Toga Night Tuesdays.

Want to go to college? With living costs, tuition, books, and everything else, it's going to cost you about as much as a fancy sports car or a nice condo. We could say the cheesy thing about how a college education will take you further than a BMW. And, hey, maybe it's true, but you're still going to have to cough up the dough.

If your parents or granny want to save up cash for you, they can use a 529 Savings Plan. It's a tax-advantaged college savings plan for the middle classes. If you meet all sorts of standards, the taxes you pay on college savings are deferred, letting you save up more. Just one thing: you're going to have to start with a 529 Savings Plan early on if you want to sock away enough for college. If you start saving first semester of your senior year of high school, you’ll probably only be able to afford half of one textbook. Which is fine. Nobody really knows what happened before 1776 anyway.

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Finance: What is a Pension?31 Views

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finance a la shmoop. what is a pension? well it rhymes with tension, and likely

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for good reason. if you're a teachers pension or a fireman's pension or [person wearing dark glasses writes something down]

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another state employees pension that's backed up by a state that's going

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bankrupt. Hi, California, Hi Illinois. well we're looking at you. all right people

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well a pension is another term for a retirement fund. but what's special about

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a pension is that the employer essentially forces you to put away money

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for your retirement and then they invested for you.

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how nice. or at least be sure you invest it well on a salary of 75 grand a state [gambling table shown]

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employed ditch-digger might get a contribution of say 10 grand a year into

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her pension, and that's each year 10 grand of forced savings for as long as

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she you know digs ditches for the state. and in some states where the unions are

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strong in the governing financial knowledge is weak the government

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guarantees a minimum financial return on the pension investment made on behalf of

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the employees. that is in California for example the state guarantees a 10% per

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year return on their invested pension savings. if the invested return like [equation]

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investing it in Wall Street and stocks and bonds and private equity funds and

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all that stuff well if that invested return is less than that number less

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than that 10%, then the state rights to the pinch and a check to cover the

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incremental difference. yeah it's a huge Delta and it's well pretty much why you

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a Californian Illinois you're going bankrupt remember. Jesus Saves

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but Moses invests. [ Moses, holding stone tablets glares and demands interest]

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