Gifts for a richer life

A 529 college savings plan

Between 1978 and 2012, college tuition and fees increased by 1,120%, or nearly double the increase in medical expenses, according to Bloomberg. Help rescue future scholars from price inflation by opening a 529 college savings plan for a child in your life.

Nearly every U.S. state offers these plans, which are designed to help families save for higher education. Put up to $300,000 after-tax dollars into investments like mutual funds and pay no federal tax on the money that comes out, as long as the cash pays for the beneficiary's college or graduate school costs.

In between, plan assets are professionally managed. The plan's owner controls the funds, so Junior can't use the money to buy a sports car.

If Junior doesn't go to college or there's money left over, it's easy to name a different beneficiary: another child, a grandchild, or even an adult, whether that person earns a degree or not.

No one wants more education? Take the money out and pay taxes (plus a 10% penalty) on the money the account has earned.

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