There’s reason to celebrate if you’re one of the smart parents or grandparents who have opened 529 college savings accounts for your favorite student. There are over 15 million accounts out there, and 529 savings accounts are definitely the most effective way to save for college for the great majority of American families.
We spoke with reporter Ann Carrns of the New York Times last week to share what’s new with 529 accounts and how to pick the right one for you.
My top tip? Just sign up as soon as possible and get started saving. All growth within a 529 account is tax-free, and withdrawals are tax-free too as long as the funds are used for eligible higher education expenses. We’re happy to work with clients to identify the best plan for them, and determine how much they need to save each month to pay for that future diploma.
Grandparents? Don’t be shy. You can open accounts for your grandkids and stay in control until it’s time to start paying the college bills. Recent changes in the law have made it more advantageous for grandparents to help out with college. If you want to make a big contribution in advance of any income or estate tax changes, we can show you how to gift up to $75,000 per grandchild in one fell swoop (or $150,000 per child if you are married). Keep in mind that your gift will continue growing year after year tax-free once it’s inside that 529 account.
You can check out our conversation with Ann Carrns with the New York Times here.