The month of May, especially 5/29, is an opportunity to look at the many benefits of a 529 College Savings Plan.
A 529 Savings Plan is a flexible, state-sponsored savings program that is most often used by parents and grandparents interested in providing education funding for college-bound children.
Ownership and Contributions:
• Each plan has one account owner, contributor(s) and one named beneficiary. Typically, the beneficiary is a child or grandchild.
• Anyone can contribute to a 529 Plan regardless of age or income. However, the account owner controls the account and the money in it.
• The maximum amount that can be contributed to a 529 account is established by the relevant state program’s rules.
Tax Benefits:
• All 529s provide tax-deferred savings and tax-free withdrawal of funds when used for qualified higher education expenses.
• State tax deductions or tax credits may be available. (This would depend on the state’s program rules and owner’s state of residence.)
• Estate tax benefits can be significant. A 529 can provide a strategy for wealth transfer and may work well for those wanting to reduce their estate.
Higher Education Expenses:
• A 529 will pay for qualified expenses at any private or public college, university or technical or vocational school in the country and abroad that qualifies for federal financial aid.
• Examples of qualified expenses include: tuition, books, supplies, computers and in many cases room and board.
By having sound financial advice and a 529 Plan, funding higher education can be an achievable goal. Learn more about 529 Plans at a no cost, no obligation appointment with a financial advisor from TFCU Financial Advisors.
TFCU Financial Advisors
6501 Tinker Diagonal, MWC
(405) 737-0006
TFCUFinancialAdvisors.org
Rules and laws governing 529 plans are varied and subject to change. As with other investments, 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. Such benefits include financial aid, scholarship funds, and protection from creditors. 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. Tax-free withdrawals may be made for qualified education expenses. Otherwise, the deferred earnings portion may be subject to taxes and a 10% penalty. Please consult a qualified tax professional to discuss tax matters. Securities are offered through RAYMOND JAMES FINANCIAL SERVICES, INC., Member FINRA/SIPC, and are not insured by NCUA or insured by any other government agency. Funds are NOT GUARANTEED nor are they deposits or obligations of the credit union or any affiliated entity of the credit union, and are subject to risk, including the possible loss of principal. Tinker Federal Credit Union, Tinker Financial Services, LLC and TFCU Financial Advisors* are not registered broker/dealers and are independent of Raymond James Financial Services, Inc. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc., a non-affiliated third party provider to Tinker Financial Services, LLC and Tinker Federal Credit Union. All investments and information are intended for U.S. residents only. *TFCU Financial Advisors is a registered trademark and ‘dba’ of Tinker Financial Services, LLC
