Back To School Talking About 529s

With it being Back-to-school season, we thought it was as good a time as any to talk a little about 529 plans and saving for college.  As advisors and planners, we spend a lot of our time helping our clients to plan, and pay for all different aspects of their financial lives.  For many of our clients, this includes saving for college. 

One of the more popular ways to save for college today is through using 529 plans.  A 529 plan is a tax-advantaged plan used for saving and investing for qualified education expenses. There are a multitude of options when it comes to 529 plans, and for many people it can be a little overwhelming – What state’s plan do I use? How much can I put in? What do I invest it in? How do I title the account? Who should be the owner? Who else can contribute?  What can the money be used for? What if they don’t go to college?

A great place to begin your research is www.savingforcollege.com.  This site is a wealth of information, and one of our own go to resources when we work with our clients.  Ultimately there are a number of variables that go into what is the best way to save money for college, and many are unique to the individual.  There is no blanket approach that is right for everyone.

Should you have any questions about what you or a family member are currently doing in regards to college savings, please reach out to your advisor. We are here to help you make the best decisions for you and your family.

Rules governing 529 plans are varied and subject to change. There are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. Investors should consider, before investing, whether the investor’s or the designated beneficiary’s home state offers any tax or other benefits that are only available for investment in such state’s 529 college savings plan. The tax implications can vary significantly from state to state.

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.