It’s easy to open a NY 529 plan. You can start with $25 and continue contributions by check, automatic investment, electronic bank transfer, or payroll deduction. You can also transfer assets from other college savings plans. The only fee is a small a management fee of 0.49 percent. The maximum balance per beneficiary is $375,000. The beneficiary can be your child, a relative, or even yourself if you have plans to return to school.

Regarding who can invest in a NY 529 plan, the doors are open to citizens and resident aliens. All you need is a valid social security number or taxpayer identification number and a permanent U.S. address. Eligible expenses include tuition, fees, books, certain room- and-board expenses, and supplies. The school needs to be a post-secondary school which can be in the United States or abroad. For 2010 eligible expenses cover computer technology and equipment, Internet access and related services.

There are 16 investment options by Vanguard and you can choose up to five investment options. The options are age-based, individual portfolio, or price and performance based. Vanguard has been in the investment business since 1975 and has a reputation for value, client focus, and low operating costs.

Since this is the one that you will be handling on your own, let’s look at the CollegeChoice 529 Direct Savings Plan. The main features that it offers are the tax benefits, the inexpensive minimum contribution, the flexible investment choices, and the ability to maintain full control over your assets.

The tax benefits include tax-deferred growth, federal tax-free qualified withdrawals, special tax credit for Indiana residents, gift-tax and estate planning benefits. If you take out money for non-qualified reasons, that money is subject to federal, state and local income taxes and possibly a 10 percent federal penalty tax, as well as. The tax credit for Indiana taxpayers is 20 percent of their contributions to their Indiana 529 plan, to maximum of $1,000 credit per year.

You can contribute as little as $25. Actually you can open an account for $25. The maximum contribution is a total of $298,770 per beneficiary. The annual asset-based fees are very low, ranging from 0.35 percent to 0.95 percent. If you are an Indiana resident, there is no annual account maintenance fee and if you or the beneficiary is an Indiana resident, there is no annual account maintenance fee. Non-residents can open an Indiana 529 plan but the annual account fee is $20 but this is waived if the account balance is at least $25,000. Annual contributions can be as $13,000 per beneficiary individually. If you and your spouse file taxes jointly this is doubled. The CollegeChoice Advisor is similar but the investments are managed by asset managers.

• Pennsylvania taxpayers can deduct 529 contributions for up to $13,000 per beneficiary annually. Married couples can deduct double that – up to $26,000 per beneficiary per year. Of course, this assumes that each spouse has a taxable income of at least $13,000.
• A person can contribute up to $65,000 in a single year – double that for jointly-filing married couples – per beneficiary. This contribution is viewed as gift spread over five years.
• 529 funds are exempt from Pennsylvania inheritance tax.
• The Pennsylvania 529 Guaranteed Savings Plan (GSP) allows you to save in a way that your investment is guaranteed to match the rate of college tuition inflation,
• You can have a flexible contribution plan so that you can invest a mere $25 at a time.
• Each beneficiary can accumulate up to $368,600 in his or her Pennsylvania College Savings Program accounts.
• There are no income restrictions. So regardless of how much or how little you make, you can open a PA 529 plan.
• There is no enrollment fee or annual maintenance fee.
• You do not have to live in Pennsylvania to contribute to a PA 529 plan.
• You can participate in the PA 529 plan without a broker and buy the plan yourself.

There are two types of 529 plans — The Pennsylvania 529 Guaranteed Savings Plan and the Pennsylvania 529 Investment Plan. The first one keeps up with tuition inflation and the second one offers 13 investment options.

• With an Education Savings Account (ESA) there are income limits on investing. With the 529 Plan your income does not impact your 529 plan eligibility.
• Contributions to 529 plans qualify for the $11,000 ($22,000 for couples) annual gift tax exclusion.
• You can contribute up to five years of gifts in the 529’s first year.
• You can contribute as little as $25 a month to a 529 plan.
• In most 529 plans, there is no age limit or time limit for using the money.
• You can roll the account over to another child in the same family of the first beneficiary. Family here means the original beneficiary’s spouse, children, sisters, brothers, nephews, nieces, first cousins, and the spouses of these family members.
• The beneficiary can use the money for any accredited degree-granting educational institution – public, private, two-year, or four-year.
• If the beneficiary gets a scholarship, dies, or is disabled the 529 account can be rolled over to another family member or it can be cashed out. However if you cash it out, you have to pay taxes.
• You cannot use your 529 plan account as collateral for a loan.
• If you withdraw the money for reasons other than paying for qualified higher education, you pay tax plus a 10 percent penalty.
• 529 contributions have to be cash. You cannot roll stocks into it.
• 529 accounts are considered gifts. This means that they are not considered as part of your estate assets.
• Each beneficiary must have an individual account. Family members cannot share an account but if the beneficiary does not use his or her 529, then it can be rolled over to another family member.
• Each state has different rules about 529 tax breaks.
• Some states have higher 529 expenses such as enrollment fees, annual maintenance fees and program management fees.

The only question really is which plan to choose. Let’s compare the 529 vs Education IRA. These are the only two real choices when it comes to saving money for college because these are the plans that provide for big tax breaks.
529 education savings plans are tax free on all counts.

The contributions, account growth and withdrawals, so long as they are used for tuition fees, are tax free. The 529 plan is great way to save on taxes while creating a future for your child. As a side note, the name of the plan is derived from Section 529 of the Internal Revenue Code which is the section that was created in 1996 to implement this kind of education savings plan. There are two types of 529 Plan – a Savings Plan where your contributions are invested in mutual funds or something similar and a Prepaid Plan where you pre-pay all or part of the costs of an in-state public college education. These funds can be converted for use at private and out-of-state colleges. There is also an Independent 529 Plan which allows you to prepay for a private college.

The Education IRA is quite similar but there are two differences and these can be counted as advantages or disadvantages, depending on your point of view. One difference is that an Education IRA allows you to choose where to invest thus not limiting the investments to mutual-fund accounts. The other difference is that Education IRA savings can also be used for education at private and religious elementary and secondary schools. The 529 can only be used at an approved institution of higher education.

This is an account that acts as an incentive, tax-wise, for those who want to save money for a child’s education and benefit while doing so. Regardless of who is investing in the recipient’s Education Savings Account, there is a limit on the amount that can be invested in one year. The limit is $2,000. However these contributions are not tax deductible but they do grow tax free and this can amount to a nice benefit for the recipient. The money can be withdrawn and used and there is no tax on that money so long as it is less than the education expenses.

The distributions are not taxable if the attendance is at a qualified educational institution. The range of eligible institutions is relatively broad and includes public, private or religious schools providing elementary or secondary education or colleges, universities, and vocational schools eligible for a Department of Education student aid program. If the distribution is more than the expenses, the excess is taxable with an extra 10% tax added on. If the recipient turns 30 before all Education Savings Account money is used, there is a window of 30 days for distributing what is left in the account. Otherwise, it will be taxed with the extra 10% tax added on. There is one other way to avoid being taxed on the remainder and that is to roll to money over to a new Education Savings Account for someone else.

First, what is an Education IRA? It is simply a tax-deferred investment vehicle which was established on January 1, 1998. It is not technically an IRA at all but the focus is for education expenses. The basic rules are:

• Start early to maximize its benefits.
• You can invest up to $2,000 a year.
• While the money invested is non-taxable – so long as the money is used for eligible educational expenses such as tuition, supplies, books and room and board.
• The more money you make, the less you can contribute to an education IRA.
• If a single parent has more than $110,000 gross annual income per year, he or she is not eligible to contribute to an Education IRA. For both parents the cut-off amount is $220,000 joint annual income.
• If the designated Education IRA child does not go to college, the Education IRA rules are that it can go to another of your children.
• While the Education IRA is not taxable, if the student uses the money for things other than eligible educational expenses, account, the tax must be paid and with an additional 10% tax.
• Talk to an IRS agent to get the best deal you can before investing in an Education IRA.

E*TRADE is one of the most popular online stock brokerage firms that offer all kinds of rollover IRA accounts.

If you already own an IRA account, make sure that you open a separate rollover IRA for your 401k contributions. Keeping 401k accounts separate, keeps that money eligible for you to roll it back into your new job’s 401k plan if they will let you. If you rollover the money into an existing IRA, when you contribute your after tax dollars, that money is no longer eligible to be rolled over into a new E*TRADE 401k rollover.

Contact your Human Resources Department and fill out all of the necessary paperwork to start the E*TRADE 401k rollover process.

Now all you have to do is wait for the money to roll into your new E*TRADE 401k rollover account.

It is tempting to cash out your 401k when you leave a job, but this should not be done unless it is a dire emergency and you must have the money. By cashing out your 401k, you will only get 60%-70% of the amount you have invested into your 401k. This is one thing that makes E*TRADE 401k rollovers a better option. You may be subject to early withdrawal penalties by taking a lump sum for your 401k payout. Most of us need all the money we can get our hands on.

In the end it is up to you how you want to handle your 401k account. If you want to make sure you are not losing the hard earned money you invested, an E*TRADE 401k rollover account makes good sense. We all need to have a plan in place for retirement.

The average cost of other IRA’s are about six times more than Vanguard’s. This difference can really add up over time. The ways Vanguard helps keep your costs lower are: No sales loads, no 12b-1 distribution or marketing fees, no commissions, and no account service fees if you have more than $100,000 invested in Vanguard funds, or signing up to receive statements and other important documents electronically. Otherwise a $20 fee applies to each account that has a balance of less than $10,000.

Vanguard rollover IRA funds have delivered solid, long term investment results. Forbes and Money magazines include articles on Vanguard funds.

The service you will get at Vanguard is hard to beat. Associates only have your success in mind. These associates will help you get started with your Vanguard rollover IRA, they will answer your questions, and offer you their support for obtaining your financial goals.

If you have IRA’s at other financial institutions, moving your assets to a Vanguard rollover IRA is easy. Rollover specialists will help you with the paperwork, explain all investment options to you, and they will even contact your financial institution so you don’t have to.

When you are ready to rollover your IRA to Vanguard, have your most recent statement handy, and know what your financial institution needs to release your money. Now you are ready to open a Vanguard rollover IRA account. You can reach rollover specialists at 1-800-416-5827.

Go with Vanguard for your retirement needs to simplify your finances. Having fewer accounts will make it easier to keep your retirement goals in sight. Call Vanguard today, or visit them online to find out what Vanguard rollover IRA is best for you.

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If you ever need help with mutual funds, visit the E*TRADE online service center, call 1-800-ETRADE-1 or visit an E*TRADE branch near you. Learn the why, how, and what of mutual funds with all of the free tools and education together in one website.

We all need to think about retirement, not just if we are close to retirement age. It is a good idea to start saving for your future right away. E*TRADE mutual funds make investing easy.