Year End Planning: 529 College Savings

 A Gift that Keeps on Giving All Life Long!

Having trouble finding a meaningful gift for a loved one?   Consider giving the gift of education by contributing to a 529 college saving plan.  

Parents, grandparents, aunts, uncles, friends and other family members can all help a child or loved one achieve their dream of higher education by contributing to a 529 savings plan.   In fact, hundreds of thousands of grandparents have already enrolled in 529 plans. If you are a grandparent, you will find 529 plans uniquely suited for this purpose.

So what is a 529 plan exactly?

A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs.   Nearly every state now has at least one 529 plan available. It's up to each state to decide whether it will offer a 529 plan (possibly more than one) and what it will look like. That  means 529 plans differ from state to state. 

What is the best way to fund an account?

You may contribute to an existing account.  If you do not want to set up your own college savings account, you can easily contribute to an existing account via check, with automatic recurring contributions from your bank account.   Everyone loves a surprise, but in this case, it’s best to coordinate your gifting intentions with the 529 plan owner. 

You may open your own account.   Even though you name a beneficiary, you always control withdrawals from the account.   You retain control over investment decision and you can change beneficiaries to other family members if desired. 

It’s not uncommon for college saving to come from multiple funding sources and accounts.  However, the best college planning strategies often consolidate these efforts and monitor progress to ensure your college savings goals are met. 

For parents, opening a 529 account can help to simplify the giving process and encourages contributions for the holidays and beyond.    Need help getting started?  Please feel free to give me a call or email to discuss your specific needs.    Visit the following links for additional research and plans applicable to Michigan residents. 

Online Resources:

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Before investing, you should consider whether your state of residency, or your intended beneficiary's state of residency, offers a state tax deduction or any other benefits that are only available for investments in that state's 529 savings program.  An investor should consider the investment objectives, risks and charges and expenses of the MI 529 Advisor Plan before investing.  This and other important information is contained in the Plan Disclosure Statement, which should be read carefully before investing, and which is also available from your financial advisor.

The information contained in this report has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any information is not a complete summary of all available data necessary to make an investment decision, and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors.  Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.