It s a double-edged sword with the costs of college rising. The new plan, called Variable Investment Funds, offers options based on the child s age and the risk a parent or other investor is willing to take. The money, which can be deducted directly from paychecks, is invested by Putnam Investments, which is based in Boston. The return fluctuates with the stock market. Before October, the only savings option the authority offered was the tuition credit plan.
More expensive schools require more units and less expensive schools, fewer units.
This plan is guaranteed by the state. Those numbers are for the guaranteed fund, but can serve as a guide for the investment funds, she said. While more risky, the aggressive plans are the favorite of many financial advisers, including Robert Keidan, owner of Keidan Financial Consultants. Over the long haul, stock funds have clearly outperformed at a 5 or 6 percent rate of return. The new plan was created after a change in the federal tax code in 1996 allowed for riskier investments.