How does a 529 account work?

How does a 529 account work?

Each 529 plan account has an account owner, who controls the investments and selects the beneficiary, and one beneficiary. The account owner and beneficiary may be the same person. The money in a 529 plan may be used to pay for the college expenses and K-12 tuition of the beneficiary, tax-free.

What is a 429 account?

What is a 529 plan? A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Can you lose money on a 529 plan?

You don’t lose unused money in a 529 plan. The money can still be used for post-secondary education, for another beneficiary who is a qualified family member such as younger siblings, nieces, nephews, or grandchildren, or even for yourself.

How do I set up a 529 college savings account?

Step-by-step guide to opening a 529

  1. Select a plan. You’ll have to choose between a savings plan or a prepaid plan.
  2. Choose a beneficiary. This will likely be your child — but remember, you can change the beneficiary at any time without penalty.
  3. Open the account. Most accounts can be opened online.
  4. Build your portfolio.

Can I open a 529 without a Social Security number?

To open a 529 college savings account, you will need the beneficiary’s social security number. Parents can open a 529 account with one of their own social security numbers and change the beneficiary to the child at any time without penalty.

How does the path2college 529 plan help you?

There are so many ways the Path2College 529 Plan can help you reach your college dreams. Helping your employees and clients save for college helps you too. As the state of Georgia kicks off College Savings Month, one lucky Pine Mountain baby was awarded $5,529 for her college savings.

Are there any fees to open a 529 account?

No annual account fees or minimums when you open a 529 account. Ready to start saving for college? Some states offer favorable tax treatment or other benefits to their residents only if they invest in their own state’s 529 plan.

Where can I find more information about 529 plans?

You can learn more about 529 plans and other education saving options on FINRA’s Saving for College website (link is external). The website contains links to other sites, including the College Savings Plan Network (link is external) and the Internal Revenue Service’s Publication 970 (Tax Benefits for Higher Education).

Can a 529 account be a financial aid asset?

If the 529 account is owned by someone else (such as a grandparent), it doesn’t count as an asset for federal financial aid purposes.

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