Are you a parent or know someone who might be planning for future college expenses? We’re discussing 529 plans in the video below, a fantastic way to save and invest in education costs. Discover how these tax-advantaged accounts can grow your money tax-free, and explore the versatile uses for 529 plans, from K-12 tuition to apprenticeships and more.
Video Transcript:
Hi friends! If you're a parent or have a potential future college student in your life, you might already be thinking about how to handle those expenses. Today we’re going to talk about 529 plans, which can be a great way to save and invest for college.
What is a 529 plan? What exactly is a 529 Plan? Simply put, it's a tax-advantaged investment account designed specifically for education costs. The money you put in grows tax-free, and when you use it to pay for qualified education expenses, you don’t pay any taxes on the money you take out. While not as common, some states offer Prepaid Tuition Plans, allowing you to lock in current tuition rates for the future.
Another nice feature of 529 Plans is versatility. They’re not just for 4-year college. You can use them for K-12 tuition, apprenticeships, trade schools, community college, and even to pay student loans. As the account holder, you stay in control of the money, deciding when and how to use it.
Getting started is easy. Each state has its own 529 program so start by looking up the program of your state of residence. It doesn’t mean the student has to go to school in that state, but some states give you income tax deductions based on your contributions which can be a nice added benefit. Open your account online, connect your checking account, and start making regular contributions. Most states offer an age-based investment option so you can easily select an investment mix based on the student’s future enrollment year.
To recap, 529 Plans can be a great way to save and invest for future education expenses. They offer great tax benefits, potential for growth, and flexibility to use how you see fit. It's never too early to start planning for your student’s future, so check out how a 529 Plan can work for you and your family. If you have any questions, we are always here to help. Happy saving!
