The Benefits Of A Section 529 Plan For College Savings

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

While you may not be getting ready to bid your child adieu for the fall semester of college, if you do have children at home it's important to think about saving for the cost of tuition years in advance. So why not start now? Below, we dive into 529 Plans and outline some of the benefits of taking this approach for growing your bank account for your child's college years:

1. In December of 2014, new legislation mandated that there be more flexibility for parents who use 529 plans for college savings. Now, those who hold this type of account are permitted to change their investment elections twice each calendar year. That means if you need to adjust your investments due to a change in financial status or needs, you can do so without worry more than once.
2. When used for qualified education expenses at accredited institutions such as colleges, universities, even some technical schools, the funds in this type of plan can be taken out free of federal income tax (examples of qualified expenses include tuition, room and board, and school supplies). 
3. Though each state has their own restrictions on how much can be contributed to a savings plan, 529 plans typically have a high contribution limit across the board. Additionally, these types of plans are known to have no income restrictions, making them accessible by many!

Of course like any other savings plan, the rules and regulations attached to 529 plans can change at any time; not to mention, there are always risks attached to investing. But, while this may be so, the benefits that a 529 plan can bring to you can certainly outweigh the risks when you see how they aid in your college savings efforts.

For more information about 529 plans, be sure to contact American Investment Planners LLC at (519) 932-5130. Our team is well versed in various types of savings plans and can let you know if this is the right plan for you and your family's needs!

Above information courtesy of Emerald Connect.