THIS IS A RUSH TRANSCRIPT.  THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. CAROL COSTELLO, CNN ANCHOR: But first, some tax saving tips for your child's college future.</s>JULIA BOORSTIN, FORTUNE 500 ADVISER: A college saving plan or 529 allows parents to invest in their child's education without paying any federal taxes and for most states, you can avoid paying state taxes as well. Parents can set aside as much money as they want every year, there's no cap, until they reach the federal limit, which is the equivalent of what a very expensive college or university would cost in any state. There's no penalty if your child decides not to go on to higher education. You could transfer the fund to another sibling or another relative who wants to pursue college. The best thing to do is contact TIAA-CREF or go to savingforcollege.com. These will both tell you how to pick a plan that's specific for your state to avoid state taxes, and it's great because they put it up all for you. 529s are a great way to save for your child's education. There is no reason to set aside money on your own and then shift it over to an account in their name as they get older because 529s allow you to invest and save tax free.
Tax Saving Tips for Child's College Future