A 529 plan is an investment account that you can use to save for college at the same time your savings will have a minimal impact on financial aid eligibility. It is a tax-advantaged savings plan that offers tax benefits when used to pay for qualified education expenses.
Why should one choose a 529 Plan?
- Savings for education: It is a tax-advantaged savings account for the beneficiary’s education expenses.
- Control: A 529 plan gives you the control to maintain ownership of the account till the time the money is withdrawn.
- Flexibility: This plan gives you the flexibility to use the money for a wide range of educational expenses like college fees, K–12 tuition, other apprenticeship costs, and your student loan repayments
Will I lose my money if I invest in a 529 college plan and my child does not go to college in the future?
No, as an account owner you will have control over your 529 accounts. If your child decides not to go to college:
- you can name another eligible member of your family as a beneficiary (subject to plan rules)
- you can use the funds for your qualified education expenses
- you can take a non-qualified withdrawal
However, a non-qualified withdrawal subjects your earnings to a 10% federal penalty and applicable federal, local state, and income tax. Your assets in a 529 plan account can grow in perpetuity; there are generally no time or age limits on your use or distribution of plan assets.
Let EZ Online Service help you choose a policy that will fit your needs. Protecting all your assets, whether business, personal or both, is our primary goal. A well crafted plan designed by an expert can lessen the impact of some of life’s most common, yet unforeseen accidents.
