Top 10 Things Everyone Should Know About College Plans
Top 10 Things Everyone Should Know About College Plans
1. Helps Pay for More than Just Tuition
Withdrawals can be used for any qualified higher education expense, including tuition, mandatory fees, supplies, books,
computers or othe required equipment, and room and board, if the beneficiary is enrolled at least half-time.
2. Ability to Change Beneficiaries
The beneficiary can be charged to a member of the immediate or extended family (including siblings, grandchildren,
nieces, nephews, cousins and more.)
3. Control of Assets
The account owner- no the beneficiary- maintains control of the assets, including how and when they will be used.
4. Contribution Flexibility
Many 529 plans allow account owners to contribute as little as $50 to an account. Most plans allow account owners
to contribute $250,000 (or more) per beneficiary over the lifetime of the account.
5. Wide Range of Schools to Choose From
Accredited schools include any postsecondary college, university or vocational school that is eligible to participate in
student aid programs administered by the U.S. Department of Education. This includes approximately 7,000 schools in
the U.S. and many outside the U.S.
6. No Income Restrictions
Anyone can open a plan regardless of their income.
7. Mutliple Investment Options
Most 529 plans offer a wide range of investment choices allowing you to invest your assets in the portfolio that best suits your college
investing goals.
8. Convenience
Many 529 plans offer features that make them a convenient way to save for college, including monthly automatic investment
plans and portfolios that automatically rebalance as the beneficiary gets closer to college.
9. Earnings Grow Tax Free
Earnings are free from federal income tax when withdrawn for qualified higher education expenses. Many states provide
additional 529 state tax benefits to residents, including state income tax-free earnings for qualified withdrawals and/or state
income tax deductions for contributions.
10. Estate Planning
Five years' worth of gifts (up to $60,000 for an individual or $120,000 if a married couple) can be made at once to
a 529 plan without federal gift tax, as long as no other gifts are made to the same beneficiary over the five years.
