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Expert suggests three plans to help save for college

PHOENIX -- Your child may be young now, but someday they'll be heading off to college. You probably need to start saving money now to pay for it.

Mike Sullivan of the Take Charge America Consumer Credit Counseling service is suggesting three plans that might help you save.

One is called the 529 plan, which allows you to save up tax free earnings for high learning.

"It can be mutual funds or CDs, whatever your state happens to offer," Sullivan said. "You can contribute every year. In most states, including Arizona, you get some kind of a tax benefit for your donations."

Sullivan said another savings plan is called Coverdell. It used to be called an education IRA.

"There's a smaller limit as to how much you can put into a Coverdell," Sullivan said. "But there's also a little more flexibility even than a 529 plan. If you're only saving small amounts, say a couple of thousand dollars a year, I personally think it's just as good as a 529, maybe even a little bit better."

The third savings plan is the Roth IRA.

"It's not really a college savings vehicle, it's a retirement savings vehicle," Sullivan said. "But you can withdraw your contribution for higher education purposes without a penalty."

When asked which plan he would personally choose, Sullivan said the 529 plan is the best for people who can sock money away for their kids' college.

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About the Author


Years with the company: I started on January 2, 2006.

Education: I was born in San Antonio, Texas, but we moved to Phoenix when I was one-year-old in 1957. I grew up here and graduated from Alhambra High School and attended Phoenix College.

Family: I am married to my wife Rene', who is a librarian in the Washington school district. During free time, I may be found playing basketball in the driveway with my son, Devin. He's also keeping me busy with school, Little League, and playing in chess tournaments around the Valley.

Favorite food: Lots of favorite food, but our favorite restaurant is Fajitas.

Favorite spot in Arizona: The Little America Hotel in Flagstaff.

Favorite news memory: We have to go back to October 15, 1979. I was a country music air personality at KROP Radio in Brawley, California, when we had a 6.7 earthquake. Thankfully, there were no deaths and only minor injuries, but the entire community was pretty freaked out and listening to the station on their transistor radios. I would not want to go through an earthquake again, but it sure was a great night to work in radio and see how it can make a difference in people's lives.

First job: Working as a stringer for 'The Arizona Republic' at high school football games. My first real job was flipping burgers at the old Sandy's Hamburgers at 51st Avenue and Indian School Road. My first radio job was as announcer at KALJ radio in Yuma in 1977.

First concert: Doug Oldham gospel concert in the 1970s at the old East High School in Phoenix.

Favorite sports team: Phoenix Roadrunners minor league hockey. My dad took me to a game when I was in grade school, and I was hooked. I wanted to be a radio hockey play-by-play man. I used to take my cassette recorder and sit up in the rafters of the Coliseum and do play-by-play. It was great later in life to also take my son to Roadrunners games. Too bad the team just folded, I'll miss them. (Going to the Coyotes is fun, but they're not "my" team.)

Outside interests: My family and I are active in our church - Northern Hills Community Church in Phoenix. We enjoy going to movies, sporting events, and like to vacation at the Beach Cottages in the Pacific Beach area of San Diego. And I love to play catch, basketball, football with my son.

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