Today is May 29th and we’re celebrating one of my personal favorites: National 529 College Savings Plan Day.
Birthdays, Mother’s and Father’s Day, Christmas – There’s no shortage of holidays and special events to look forward to each year. This month is no exception. 529 College Savings Day was created to raise awareness of 529 plans, which offer a flexible, tax-advantaged way to fund a future college education. In the spirit of the holiday, below are five facts about 529 plans.
1. There are no account minimum to open a 529 plan.
Furthermore, 529 plans have no income limitations, meaning anyone can contribute to a plan. Whether you’re funding your own child’s education or inviting friends and relatives to contribute, there are no restrictions on participation.
2. 529 plan funds can be used to pay for most higher education expenses.
529 funds covers a wide scope of qualified education expenses, from tuition to room and board, books, computers, and school supplies
3. 529 plan beneficiaries can be changed.
Anyone with a valid Social Security number can be the designated beneficiary of a 529 plan, and they don’t need to be related to the 529 account owner. In the event that the beneficiary no longer needs the funds (for example, if they earn a full college scholarship), the beneficiary can be transferred to another member of the existing beneficiary’s family.
4. 529 plans feature tax-free earnings.
Unlike some types of savings accounts, 529 earnings grow tax-free, and funds can be withdrawn with no federal income tax when applied to qualified expenses. $50 saved every month when a new born is saved until the child reaches 18 has a potential to grow over $30,000. This is tax free dollars that can be utilized for any qualified education expense.
5. Many states offer their own 529 plan benefits as well.
The majority of US states offer their own 529 plan, which comes with a tax deduction for residents enrolled in the in-state program.
These are a lot more facts regarding 529 college savings. and contact me to learn more.
I haven’t met a parent who regretted saving for college. Most people say I wish I would have saved more and started started earlier.
