As the year draws to a close, many investors are making decisions for their long-term financial goals, including saving for college through Michigan Educational Savings Plans (which are the national Section 529 College Savings Plans). With increasing numbers of investors turning to these plans to help finance higher education costs, the Office of Financial and Insurance Services (OFIS) wants to ensure consumers are well-informed before making investment decisions.

"It pays to do your homework before investing in a College Savings Plan," said OFIS Commissioner Linda Watters, "and to educate yourself about the differences among the many plans offered today in order to choose the plan that's right for you."

Watters stressed that College Savings Plan choices are growing at a fast pace, and noted that the most recent statistics from the College Savings Plan Network (an affiliate of the National Association of State Treasurers) showing that state-sponsored 529 College Savings Plans hold more than $72.4 billion in assets.

The State of Michigan administers the Michigan Education Savings Program (MESP) as its 529 plan. This savings plan is designed to encourage saving for future higher education costs by allowing contributions to grow tax-free. The money investors take out later from the plans is free from federal taxes as long as it is used to pay for qualified higher education expenses.

While state and the District of Columbia offer at least one 529 College Savings Plan similar to the Michigan Education Savings Plan, only MESP offers a Michigan income tax deduction for Michigan residents. Although this can be purchased directly from the plan administrator, industry estimates show that as many as three out of four investors purchase their plan with the help of an investment professional, such as a financial advisor or broker.

"Regardless of how the plan is purchased, investors should have a basic understanding of the plan's benefits, costs, and tax implications," Watters said. To help investors select the most appropriate college savings plan, OFIS is suggesting four key questions investors should ask their financial professional before investing in a College Savings Plan.

"Before selecting any plan recommended by a financial professional, it is always wise to do your own research to double-check this advice," Watters said.

For more information about College Savings Plans, you can go to the OFIS website at www.michigan.gov/ofis to view a brochure put together by NASAA along with the College Savings Plan Network and the Investment Company Institute called "A Guide to Understanding College Savings Plans."

For more information regarding the State of Michigan's MESP 529 plan, please visit http://www.misaves.com.