COLLEGE SAVINGS
The benefits of a quality education are invaluable. Receiving that education, however, does come with a price tag. If you're like most parents, there are already a lot of demands competing for your hard-earned dollars, so it can be hard to imagine how you might fit in saving for college, too. Because of this need, a few programs have been made available to add value to college savings, such as 529 Plans**.
A 529 plan is a college savings vehicle that offers federal, and sometimes state, tax advantages. They are generally sponsored by states or colleges, but they must follow federal law. Specifically, they must abide by Section 529 of the Internal Revenue Code, hence the name “529” plan.
In a 529 plan, you are the account owner and control the account, your child is the beneficiary, until your child reaches the age of majority. Your contributions grow tax deferred, which means that you don't pay income tax on your earnings each year. You don't need to be a parent to open a 529 plan account; a grandparent, relative, or friend may open an account or contribute money on behalf of your child.
Connect with your CFS advisor to find out more about specific 529 plans and how to start investing for your child's future:
**There are fees associated with 529 savings plans. Investments in 529s involve investment risks. You should consider your financial needs, goals, and risk tolerance prior to investing. More information about 529 plans can be found in the issuer's official statement or plan disclosure document which should be read carefully prior to investing. Most 529 plans are sponsored and administered by states. State tax benefits vary among the states and some offer residents additional tax benefits if they invest in their own state plan. Consult a qualified tax professional for more information.
