529 Plan Advantages & Benefits

A 529 plan is designed to encourage early and consistent savings efforts by offering an easy, affordable and convenient way for families to save for college. While the tax advantages are one of the primary benefits, states also offer a variety of features and benefits to help families reach their college savings goals. Main advantages/Benefits are listed below:

1. All money grows free from federal and state income tax.

2. All withdrawals are exempt from federal income tax when used for qualified higher education expenses.

3. Many states also exempt withdrawals from state income tax for qualified higher education expenses

4. The account holder retains control of the assets within the program regardless of beneficiary's age.

5. Money can be used at virtually any accredited college in the country

6. Money can be used to pay for a variety of college expenses, including tuition, fees, room, board, books, supplies and required equipment

7. Assets within 529 plans are protected from bankruptcy.

Click here for a table shows the limits, if any, on state income tax deductions for section 529 plan contributions. 529 Deductions allowed states

If you need any more information regarding the above topic, contact me at 630-663-1500.