In 1996 the Internal Revenue Code was modified to include Section 529, creating an education savings benefit for higher education. While contributions to the Plan are not tax deductible, the earnings on the Plan are; making the 529 College Savings Plan an excellent saving tool when you are doing your financial planning for college for your children. With changes to tax code going into effect this year, the Plan becomes even more attractive.
A financial planner can help you enroll in a 529 College Savings Plan
In 2013, couples earning over $450,000, and singles earning over $400,000, will face higher taxes and lower deductions; while all Americans will see greater withholding from their paychecks. In addition, it is highly likely that we will see significant cuts to Federal Financial Aid even as colleges and universities continue to increase tuition and fees. By beginning to save for college now, your financial planning for college will be much more likely to be successful in covering your child’s tuition and expenses later.
A certified finance planner will help you find the best 529 Plan for your family, taking into account all aspects of your family’s current and expected future needs.
Saving for college continues to be a high priority for families
A 529 College Savings Plan should be the first choice when you and your family are performing your financial planning for college. The Plan makes it easy to save with a low minimum investment, automatic contributions, and target-date funds that manage investment risk for you – moving more into bonds and cash as your student approaches college age. With a 529 Plan, you can start with a small initial investment and adjust as you refine your college savings goals.
Financial planning for college does not need to be complex or difficult. A 529 Plan will allow you to…
- Earn tax free investment returns on your college savings – as long as funds are used to pay qualified higher education expenses
- Retain control of the funds invested throughout the life of the Plan – funds do not become the property of your student
- Benefit from professional investment management with target-date funds
- No tax reporting on earnings until you withdraw the funds
- No income limitations on contribution amounts – high income earners can receive the maximum benefit of 529 contributions
As part of your comprehensive financial planning, with a certified financial planner, your financial planning for college can be greatly simplified. Tamarind Financial Planning is here for you, with individual financial planning strategies and personal investment management techniques to help you set, meet, and exceed your financial – and life – goals.