529 College Savings Plans

Saving for an education can be a challenge,

But a 529 savings plan can help.

529 plans were created to help families save for college by providing tax advantages for qualified expenses.

Those expenses include tuition, books, housing, meals, and more.

So put your money to work today, and invest in the future of your loved ones.

Call us or visit our website for more information.

Speak to a financial professional for next steps.

Families wanting to start a nest egg for education costs need to look no further than a 529 plan.

Instead of saving money in a traditional low interest savings account, a 529 plan has the potential to earn higher returns, letting your money work harder for your family.

Here are some other reasons why many families love 529 plans:

They’re not just for college. 529 plans can be used for K-12 tuition, vocational training, and more.

529 plans are tax-advantaged, meaning that earnings and withdrawals are tax-free when used for qualified educational costs. Some states might even offer tax deductions or credits when using an in-state 529 plan.

Funds in a 529 are controlled and owned by the account owner to ensure that the money is being used as intended. Beneficiaries have no legal claims to the money earned.

Anyone can contribute to a 529 plan, making it a perfect gift opportunity for friends and family.

With Invesco CollegeBound 529, there are no minimum account contributions, so anyone can contribute an amount they feel comfortable with. Contribution amounts are easy to change and can even be set up on a recurring monthly or quarterly basis.

Do the benefits of a 529 plan match with your savings goals? Learn more about setting up an education savings plan with our ABCs of Education guide.

When is the “right time” to open a 529 savings plan?

The earlier you start saving, the better. Setting up a 529 account when your child is born maximizes the time you have to save. But if you didn’t start then, that’s OK! There are plenty of opportunities to get started.

Are you close to paying off a debt? If so, the money you budgeted for debt repayment could be used to start a 529 plan.

Have you gotten a raise? Consider putting a portion of that money aside for college. And be sure to find out whether your employer offers a 529 as a benefit. Some companies will even match your contributions!

Do you have family and friends looking for gift ideas for your kids? Anyone can give the gift of education by contributing to a 529 account.

Use our College Savings Calculator to get a better understanding of the total cost of an education and how 529 contributions can help make an impact.

For more about what it takes to start an education savings plan, use our ABCs of Education guide.

Ready to start a 529 plan? Consult with your financial professional and visit CollegeBound529.com

529 education savings plans are often described as “tax-advantaged,” but what does this really mean?

Earnings made on a 529 account are exempt from federal taxes if the money is used to pay for qualified educational expenses.

So, what’s considered a qualified expense?

Tuitions and fees for colleges, vocational and trade schools, and even K-12 schools are considered qualified expenses.

That’s not all. On-campus room and board, meal plans, books, computers, student loan repayments and more are also all considered qualified expenses.

Evaluating 529 tax benefits on a state level is a bit more complicated because each state manages its 529 plans differently.

Each state will fall into one of the three categories:

Some states offer either a deduction or credit for in-state 529 contributions only.

Other states offer tax benefits for both in-state and out-of-state 529 contributions.

And some states don’t offer any tax benefits for 529 plans, or they don’t have a state income tax.

Find out the tax status of each state at CollegeBound.com. Consult your tax professional to talk about which plan may be right for you.

In the world of 529 plans, everything revolves around “qualified expenses.” Withdrawals are tax-free when they’re used for qualified expenses, but are subject to penalties if they’re not.

Qualified expenses include the following:

Tuition and fees for colleges, community colleges, graduate schools, and vocational or trade schools are covered.

K-12 tuition can also be paid for by a 529 plan, but costs are limited to $10,000 a year per beneficiary.

Basics like room and board, meal plans, and books and supplies for classes are covered.

Any laptops, calculators or software required by the college or for specific classes can be paid for with a 529. Internet access or ISP fees can also be covered.

Services or equipment to accommodate special needs can be covered.

Federal and private student loans can also be paid back using 529 funds, up to $10,000.

Here’s a short list of what’s not considered a qualified expense.

College application and testing fees are not covered.

Transportation to and from school is not a qualified expense.

The costs of joining a sport, fraternity, or sorority are not covered by the 529 plan.

Use our College Savings Calculator to get a better understanding of the total cost of an education. For more about what it takes to start an education savings plan, use our ABCs of Education guide. And talk to your financial professional to create a plan that’s right for you.