If you haven't heard of it, a 529 Plan is an education "investment" or "savings" account that is run by the state. This is to be used to pay for future college expenses, and they vary greatly from state-to-state. They can be a fair option for saving up for your children's college expenses, but they're not always the best option. So how do you know if it's best for you?
We can help see what benefits your state gives for a 529. In some cases, it's a great way to put away tax-free income toward your child's education, but, on the other hand, some states give very few additional benefits or tax credits. Figuring out what the state of your residence gives you goes a long way to seeing if it's a viable way to go.
- All income invested in a 529 is tax-free
- No matter what state your 529 is based out of, it can be used for an
accredited school in any other state
- Most 529 accounts will have to be reported when filling out a FAFSA
for student aid
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Disclosure: Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser. One Penn Financial Group and NPC are separate and unrelated companies. See Home Page for full disclosure statement.
An investor should consider the investment objectives, risks charges and expenses associated with 529 plans before investing. Most states offer their own 529 programs which may provide advantages and benefits exclusively for their residents and taxpayers. The tax implications of a 529 plan should be discussed with a qualified tax advisor. NPC does not render tax advice.