Invest in Their Future

A 529 college savings plan is a great way to prepare for the rising costs of higher education

Looking for a great way to invest in a child’s future? A tax-advantaged 529 college savings plan is specifically designed to help families save for future college expenses. It can make a big difference in helping a child achieve their education goals and career aspirations.

 

How Does It Work?

Although contributions to a 529 plan are not tax-deductible, the money is allowed to grow tax-free. When the funds are used for qualified education expenses such as tuition, room and board, books (and even certain K-12 costs), you don’t pay federal income taxes on the withdrawals. These plans can be tailored to fit your needs and provide flexibility, such as:

·         Use at any accredited institution. Funds can be used at eligible colleges, universities, vocational schools, and even some international institutions.

·         Control over the funds. The account owner retains control over how and when the funds are used.

·         High contribution limits. Many plans have no annual contribution cap, and lifetime limits vary by state but are often substantial.

Key Benefits

One of the biggest benefits of 529 plans is that you get to enjoy tax-free growth and withdrawals for qualified expenses (some states offer additional tax deductions or credits for contributions). In addition, if your beneficiary doesn’t end up needing the funds, you can transfer the account to another family member.

Who Can Open a 529 Plan?

Parents, grandparents, godparents, aunts, uncles or even family friends can open and contribute to a 529 plan. You can also name anyone as the beneficiary.

Class Dismissed

Just like with your 401(k) savings plan, the earlier you start, the more time your money has to grow. Even small, regular contributions can add up over time. For more information, check out savingforcollege.com. You'll find information on state-specific 529 plan options and a comparison of different 529 plans, along with savings calculators and cost estimators.

Informational Sources: savingforcollege.com.

Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.​