Invest in your child’s future by enrolling in the 529 college savings plan now! It is never too late to start a college savings plan to get a head start in paying for college. However, the earlier you invest, the more money you save in the long run. In other words, the less debt you are burdened with. The tax advantaged 529 college savings plan has many benefits that set it apart from other investments and ways of financing your child’s college education.
Benefits of Starting a 529 Plan
Flexibility: These plans are flexible. There are no restrictions on the beneficiary’s age, state of residency, school, or number of additional accounts. The student is not limited to study in the state that the owner of the account lives in. They can study wherever they choose. With a 529 plan, the possibilities are endless. The only restriction is that this money must be used only for college.
529 Plans Can Supplement Federal Financial Aid: Having money saved up in a 529 plan does not conflict with financial aid. If the money in the collegesavings plan does not completely cover the student’s tuition and fees, federal financial aid is still a viable option to supplement the college account. The college savings account will not disqualify a student from receiving federal financial aid.
The Holder of the Account is Responsible, Not the Beneficiary: In the case of a child dropping out of college, the savings account may be used to pay for another student’s tuition. Another instance may be that the savings account adds another beneficiary. The 529 collegesavings plan functions as a flexible means of saving for the college education for as many students that the account holder has added as beneficiaries. However, the beneficiaries of this plan do not have access to the funds themselves, or any way of controlling the account. The distribution of funds is strictly at the discretion of the account holder.
TaxFree: Another main attraction for people creating a 529 collegesavings account is that they are exempt from federal taxes. They may also be exempt from state taxes, but it varies from state to state. 529 collegesavings plans are affordable, flexible, and accessible for many families that seek to invest in their child’s education. Savingforcollege.com offers a free service and information about a variety of 529 plans, including a guide on how to enroll and program materials.
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