Forward Bank
How a 529 Plan Can Help You Save
May 10, 2021
Sure, education may not be the most glamorous gift, but it can be a practical option that greatly benefits the recipient. But what’s the best option for an education fund? Explore a 529 Plan and how the tax benefits of this plan could make it the right choice for your family.
Setting Up a 529 Plan
While anyone can set up a 529 Plan, it’s recommended that the account is in the beneficiary’s parent's name. If the account is in the beneficiary's name, they may have a more difficult time receiving financial aid.
Most states don’t require a minimum opening balance for these types of plans. Check with a financial advisor to see if you live in a state where there are balance requirements.
How can they use the funds?
Unlike other types of education savings accounts, 529 Plans funds can cover almost any educational expense. This includes all grades from kindergarten through post-graduate and apprenticeships.
Funds from a 529 Plan can also go towards expenses outside of tuition, like room and board.
Other Benefits of a 529 Plan
- It doesn't affect eligibility for financial aid
- The money added to a 529 account grows tax-free when used for qualifying educational expenses
- Depending on the state you live in, you can get a tax break for the contributions you make
- The funds are transferable to other beneficiaries
529 Plans are one of the best options for education funds as they cover almost every type of education and cover a broad range of expenses. If you have a loved one who needs help paying for their education, consider creating a 529 Plan for them.
It may not be an exciting gift now, but in a few years, when their student debt is diminished or nonexistent, they’ll be thanking you.
When you’re ready to open a 529 Plan for your loved ones, contact Forward Investment Services.
Forward Investment Services for 529 Plan
Meet Our Advisors at Forward Investment Services
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2021 FMG Suite.
Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer’s official statement and should be read carefully before investing.
Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state's 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investing in any state's 529 Plan.