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Follow on Google News | Is a 529 Education Savings Plan a Good Fit For Your Education Savings Strategy?By: Edward Jones Between normal, day-to-day expenses and long-term goals such as retirement, figuring out how – and how much – to save for your child's education can be challenging. Your Edward Jones financial advisor can help you determine how a 529 plan might work with your overall financial strategy, as well as think through specific questions you might have:
Anyone – at any age – can be the beneficiary of a 529 plan. The account owner, not the beneficiary, controls the account and makes all the investment decisions. And if the beneficiary decides not to attend college, the owner can generally change the beneficiary to another eligible family member. Grandparents, family friends, parents … anyone can contribute to a 529 plan, regardless of income. While setting aside money for education may seem challenging for young families, parents should not delay saving, since time is one of the biggest assets. Delaying saving even a few years can have a big effect. Setting aside money each month can make all the difference in reaching the family's education savings goals. A 529 plan should follow:
Contribution limits depend on the state's plan but are typically more than $235,000. The federal gift tax exclusion allows a contributor to give up to $15,000 per year per beneficiary, or $30,000 if you're giving as a married couple. Can a 529 plan be used to pay student loans? Effective Jan. 1, 2020, after the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, student debt repayments and registered apprenticeships are now considered a qualified expense for 529 accounts. Does a 529 plan impact financial aid? Regardless of whether the 529 plan is owned by the parent or the student, it is considered a parental asset, which generally has little impact on financial aid. For more information on your state's financial aid considerations, talk to your financial advisor. How to set up a 529 plan A financial advisor can determine what is the right product for you based on your beneficiary's needs and provide a free education report to illustrate if you are on track to meet your goal. Remember, the sooner you start saving, the better. End
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