Planning for College with the 529 Plan

Forward Financial Group |

As you start thinking about your children or grandchildren heading off to college either soon or in the future, a 529 plan is a great option to save for them. A financial advisor can answer a question that you have about these plans and the different benefits to having them set up for future education.

Tim Scanlan discusses the importance of 529 in your college planning process.

Hi, I’m Tim Scanlan and I’m new to Forward Financial Group and I wanted to share with you about the 529 plan. My son’s a senior this year and many years ago I was an admissions counselor, and I was helping people prepare for college. This is a great time as a new school year starts to look at the 529 plan as a way of funding your children or grandchildren’s college educations.

One of the nice things about the 529 plan is that it grows federally tax free and comes out from a qualified distribution as tax free. There are over 30 states that offer a deduction of state income as well. It is one of the few gifts in the IRS code where you can control the beneficiary, so if you want to change the beneficiary if someone received a scholarship you may do so.

Working with a financial advisor, you will learn about the different tips out there, like if a grandparent funds a 529 plan, it does not affect a student’s financial aid. So similarly to my son visiting colleges, and as you go through this process, it’s just another reminder to reach out to your financial advisor for help with these decisions.

The opinions voiced in are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.