(Photo: MD Duran/Unsplash)
Congratulations! It’s National 529 Day on May 29 (Get it? 5/29?)
There’s reason to celebrate if you’re one of the 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.
I recently spoke with the folks at the Florida Prepaid College Board about what’s new with 529 accounts and why they are a great way to tame runaway college costs.
My top tip? Simply 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 $80,000 per grandchild in one fell swoop (or $160,000 per child if you are married). Keep in mind that your gift will grow year after year tax-free once it’s inside that 529 account.
Want to learn more about 529s? As you can tell, I’m a big fan of 529 college savings plans. After all, I used a combination of 529 college savings and Florida Prepaid College Plans to put my own two kids through college! National 529 Day is a can’t-miss opportunity to get the word out about how great these plans are. Here’s a few of my recent articles and links you can check out for additional details on saving for college and 529 plans:
A Financial Planner’s Advice About Saving For College: Just Do It.
CNBC: Should you super fund a 529 college savings plan? Here’s what experts say
529 Plan Benefits You May Not Know About
5 Tips for Your College 529 Plan
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