Asked by admin @ in Mathematics viewed by 341 People
PLEASE HELP! CORRECT ANSWERS ONLY! 20 POINTS
In two or more complete sentences discuss the advantages and disadvantages of investing in a 529 plan versus investing in a money market account.
Answered by admin @
Answer:
1.) In 529 plan, Your account earns interest and you can contribute as much as you want. But Your investment options are limited and the money must be used for college
2.) While in money market account, the account pays higher interest than traditional savings accounts, but limited to writing no more than three checks a month. Some banks limit your cash withdrawals.
Step-by-step explanation:
Money market deposit accounts are better choices than 529 plan for money you might need to tap at a moment’s notice to cover an emergency or an unexpectedly large expense. They pay higher interest than ordinary savings accounts and give you immediate access to your money
While in 529 savings plan, If you don’t use the money invested for college tuition, you will be penalized 10 percent when you withdraw the money to use it for something else. In addition, both your state and the federal government will tax the earnings on your account in your current tax bracket.
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