Benefits of a 529 Plan
Earnings on a 529 plan aren’t taxed by the government and many states offer tax credits or deductions on 529 contributions.
Beneficiaries of a 529 plan can change easily; that means that if a student has already finished their education and funds are still available, a new beneficiary can be named to use those funds. The account owner, not the beneficiary, is in control of the distributions to ensure proper use of funds.
- Minimal impact on financial aid
Students can still apply for financial aid and the earnings on a parent-owned 529 won’t be counted as income on the FAFSA.
- More than just college…not just for kids
A 529 plan is usually known as a college savings plan, but a 529 plan can be used for any type of schooling, even K-12 education. Also, there are no limits on who can be the beneficiary, so even parents can take advantage of 529 earnings.
- Family and friends can help
Anyone can contribute to a 529 plan, making it a great choice for a gift contribution.
The earnings of a 529 plan never expire. Since beneficiaries can be changed, a 529 plan can be given to other family members for as longs as funds are available.