529 College Savings Series

Welcome to our College Savings series. Over the next few weeks, we will be providing short (maybe a long one here and there) blog posts about College Savings – specifically 529 Plans. So, what is a 529 plan? A 529 plan is a popular savings vehicle that can be established for anyone but is often used by parents and grandparents who are saving for education.

To start, we’ve recorded a video about some 529 basics, specifically surrounding our first thoughts about establishing a 529 plan (can it be too early?) and what to do after college (if I have money leftover?). We hope you enjoy the video, available at the bottom of this blog post.

Generally, 529 plans offer a set of investment portfolios containing mutual funds and/or exchange traded funds (ETFs) that have various allocations to stocks and bonds. 529 accounts are intended to be used for “qualified higher education expenses” that include tuition, fees, books, supplies, and for students enrolled on at least a half time basis, room and board as well. These qualified higher education expenses are for any private or public college, university, or technical or vocational school in the country and abroad that qualifies for U.S. federal financial aid. (Since 2017, there is also an expansion to include up to $10,000 for K-12 tuition and other costs, but more about that in another post).

What’s the benefit of a 529 plan?

• The account grows tax deferred, and your withdrawals are tax free if used for qualified education expenses.
• No income limits or age restrictions for the owner or beneficiary
• Possible state tax benefits – although you can choose any state’s 529 plan, check your state’s rules in case there is a state tax benefit
• The account owner (not the beneficiary) controls the account. That means the account owner chooses the investments, can change the beneficiary, and makes all decisions on distributions or withdrawals from the account.

Please contact us to help plan for your future education needs.

Amanda Piper & Joan Marshall

Investors should carefully consider the investment objectives, risks, charges, and expenses associated with 529 college savings plans before investing. More information about 529 college savings plans is available in the issuer’s official statement, and should be read carefully before investing