A 529 college plan is a great way to do something now, to give your kids a chance to move on after high school (and move out) and find their passion.
The Green Bay Press Gazette’s recent article, “Benefits of 529 college savings plans keep giving,” reports that the state of Wisconsin’s 529 plan is called the Edvest College Savings Plan.
Opening an account is simple. It can be done online or by mail, and it takes just $25 to start.
529 plan contributions help you save more money because your investment grows tax deferred, while they’re invested in the plan. You can select your investments or use age-based options that change, as the beneficiary gets closer to college age. The distributions are tax-free, if they’re used for qualified education expenses.
Grandparents are also able to create 529 accounts to benefit their grandchildren. If your grandchild doesn’t need the funds for school, you’re allowed to transfer the beneficiary designation to another grandchild or family member.
There are also estate planning benefits to opening a 529 plan. The annual gift tax exclusion is $15,000 for a single person, and some plans lets you to give up to five years’ worth of gifts at one time. You could gift $75,000 for a single filer and $150,000 for couples.
Education and investing are terrific examples of long-term planning, and whether it’s from parents or grandparents, a 529 plan is a win-win for education and college funding.
Reference: Green Bay Press Gazette (July 13, 2018) “Benefits of 529 college savings plans keep giving”