Properly planning for and executing on a 529 strategy can be the foundation of which the next generation’s financial success is built upon.
College Planning Made Easy
Between managing day-to-day expenses, unexpected costs, and long-term goals like retirement, it can be challenging to determine how to save for your child’s education. You need to have a plan in place so that you don’t neglect your own money goals, especially when it comes to your retirement savings. A 529 plan is a tax-advantaged way, we recommend, to put aside money for future education costs and one of the best avenues for saving for your child’s/loved one’s expenses. Withdrawals can be used for qualifying higher education expenses tax free (see list below). Distributions used for non-qualified educational expenses are subject to ordinary income tax plus a 10% penalty on the earnings portion of the distribution. At SmartPro Financial, we are here to help you determine how a 529 plan might work with your overall financial strategy, as well as think through specific questions you might have.
Qualified Education Expenses
- Tuition and related fees for college, community colleges, theological seminaries, trade and vocational schools, international schools, study-abroad programs that run through U.S.-eligible schools and more. Any accredited institution should be able to accept funds from a 529 savings plan. Find a list of accredited choices on FAFSA.
- College room and board, for students enrolled at least half-time.
- Books and supplies, including textbooks, paper, pens or additional supplies required by specific classes (i.e., a camera for a photography class).
- Computers and supplies, including laptops, printers, educational software and internet services.
- Certain apprenticeship program expenses.
- Certain student loan expenses (up to a $10,000 lifetime maximum).
- Due to the recent change in the federal tax code, you may use the funds in a 529 savings plan to pay for K-12 tuition (up to $10,000 a year per beneficiary), but withdrawals for K-12 expenses may not be exempt from state tax in certain states.
It’s never too early to start thinking about a college savings plan. Whether your child is a teenager or toddler, the best time to start a college fund is now. Let’s Talk!
College Planning - Learn Your Options
Schedule a 15 minute phone consultation with Tyler to discuss your financial and insurance goals.