What is a 529?
With higher education costs going nowhere but up, many families are doing their best to make college savings a priority. For decades the most popular savings vehicle for college has been a 529 plan. 529 Plans are state-sponsored plans that allow investments for college to grow free of certain taxes while the money is in the account.
How Do I Start a 529 Plan?
If you have decided that a 529 plan is the correct fit for your family, then the setup is very simple. To open the account, follow these steps.
- Calculate your savings needs (I recommend speaking with a Financial Advisor to ensure you aren’t under FUNDING or OVER funding the account)
- Find your state plan and the requirements for each.
- Open the account naming yourself as the account holder.
- Designate a beneficiary (you will need their social security number, date of birth, and current address)
- START SAVING- let the magic of COMPOUNDING interest work in your favor.
What are some alternatives to the 529?
If a 529 plan isn’t a good option, there are many other options to consider. A Roth IRA, although traditionally a retirement plan, is a feasible option. A Brokerage Account is a great option, Municipal Bonds, UGMA Account, and UTMA account- are all viable options as well.
Consider the benefits of beginning your college savings plan as soon as possible. An early start and application of your college financial plan helps to increase the benefits of compounding interest growth. The more money you save, the less you may need to borrow (which will cost you more money to repay), and the less you may need to take from your current income if you start saving later.
Where can I learn more?
With all financial plans, please seek the assistance of a financial advisor to ensure you are making an informed decision. If you would like to contact me to talk about any of the options discussed in this article, please reach out to me at the information listed in my Bio or call my office toll free at 877-543-7767.
“Time is key to building your financial security.”
Wishing you much success!
Tiffany Co-Founded Kingdom Group Financial, a subsidiary of AshWay Investments LLC in 2012. The company was founded to fill the needs of individuals with tax preparation and tax planning. The company has since evolved to also include Bookkeeping and Financial Services to help clients manage their investment portfolios. While working in the Governmental Sector, Tiffany gained valuable tax and accounting experience and knowledge which she now shares with her clients. The ultimate goal of her financial services practice is to empower and educate small business owners with tools to track, scale, and be successful business owners. Tiffany is also a Texas Realtor ® focused on assisting home-buyers buy, sell, rent, or invest.
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