College savings plan during divorce

While the divorce process might not be an ideal time to think about your long-term savings plan, it can be a useful starting point for a discussion about how you and your ex plan to pay for your children’s educational endeavors. Whether or not you and your ex agree on how you will pay for college or other educational pursuits, you can start saving for your kids’ future by opening a 529 College Savings Plan.

Almost every state now offers at least one type of 529 plan, and these plans can be used to meet the costs of qualified colleges nationwide. Most plans don’t affect your child’s choice of school, so you could have a Colorado plan that pays for your child’s school in another state.

Colorado offers a variety of these types of plans, but the goal for them is to help families set aside funds for future college costs. They are named for the section of the Internal Revenue Code that created these plans. The added benefit of setting some money aside in these plans each year is that they will likely offer you some federal tax benefits, so long as they meet a few basic requirements.

Still unsure about a 529 plan? Read more about the top 7 benefits of them here.