Tips for College/Post-Secondary Investing

The greatest gift you can give someone is a better tomorrow.

Investing in your children, grandchildren or nieces and nephews futures is an important part of your own future. As someone thinking about saving for college/post-secondary for yourself or others, you might have a lot to plan for. College/Post-Secondary might seem far down the road or it could be the next turn you take, but there are ways to make the most out of what is at hand.

Savings for college/post-secondary can come from lots of places, but a 529 plan (Qualified tuition program) is a great place to start, earnings are not subject to federal tax and generally not subject to state tax when used for the designated beneficiary in qualified education expenses. These include tuition and other fees required by the university, as well as room and board for students enrolled at least half time. Course requirements such as books, calculators and software are included, as are services for special-needs students.

The 3 roles in a 529 plan (Custodian, Beneficiary, Contributors)

  1. Custodian- sets up and controls the funds until they are withdrawn for the benefit of the beneficiary.
  2. Beneficiary- is usually the student or future student for whom the plan is intended to provide benefits for.
  3. Contributor- is anyone putting money into the plan for the beneficiary. This is a great way for family members/anyone to add to the account for holidays, birthdays, or other special occasions.

Contact us today for a time to discuss this and other financial planning options that will best fit your goals and dreams.  

An investor should carefully consider the investment objectives, risks, charges and expenses associated with 529 plans before investing. More information is available in the issuer’s official statement which can be obtained from your financial professional. The official statement should be read carefully before investing. 

The investments inside a 529 plan may fluctuate with changes in market conditions. When redeemed shares may be worth more or less than their original value.

Nonqualified withdrawals do not enjoy tax-favored treatment. The earnings part of a nonqualified withdrawal will be subject to federal income tax and 10 percent federal penalty. State penalties are also possible. Any tax considerations regarding 529 plans should be discussed with a qualified professional before investing.