529 Plans: Your Versatile Education Savings Solution
When most people think of 529 plans, they picture a savings account solely for college tuition. However, 529 plans offer far more flexibility, covering a variety of education-related expenses beyond traditional college costs. Understanding these benefits can help you make the most of your savings and set your family up for success.
A fiduciary financial advisor can help you navigate the nuances of 529 plans and tailor them to your financial goals. Their expertise ensures you’re fully utilizing the plan’s tax advantages and eligible expense categories.
What 529 Plans Can Cover Beyond Tuition
- K-12 Education
While originally designed for college savings, 529 plans now allow withdrawals for K-12 education expenses. Parents can use up to $10,000 annually per student to pay for tuition at private or religious schools.
Key Benefit: This feature provides parents with greater flexibility to fund education at earlier stages.
- Apprenticeship Programs
Not every career path requires a four-year degree. If your child chooses a qualified apprenticeship program, a 529 plan can cover associated costs, such as fees, books, and equipment.
Key Benefit: Encourages exploration of alternative career paths while still taking advantage of tax-free growth.
- Student Loan Repayments
A lesser-known benefit of 529 plans is their ability to help with student loan debt. You can use up to $10,000 (lifetime limit) per beneficiary to repay qualified student loans.
Key Benefit: Reduces the financial burden of student loans without compromising tax benefits.
- Room and Board
For students attending college, 529 plans can cover housing costs, whether on-campus or off-campus. However, off-campus housing expenses must not exceed the school’s published cost of attendance for room and board.
Key Benefit: Ensures your child has a comfortable living environment while pursuing higher education.
- Technology and Supplies
529 plans can be used to purchase laptops, software, internet access, and other supplies required for education.
Key Benefit: Keeps students equipped with the tools they need to succeed academically.
Maximizing the Tax Benefits of a 529 Plan
One of the most significant advantages of a 529 plan is its tax-advantaged growth. Contributions grow tax-free, and withdrawals for qualified education expenses are also tax-free.
By working with a fiduciary financial advisor, you can ensure:
- You’re contributing the maximum allowable amount without triggering gift tax consequences.
- You’re leveraging state-specific tax deductions or credits where applicable.
- You’re withdrawing funds for qualified expenses to avoid penalties.
Potential Drawbacks to Keep in Mind
While 529 plans are incredibly versatile, there are a few considerations:
- Non-Qualified Withdrawals: If you withdraw funds for non-education-related expenses, you’ll face taxes and a 10% penalty on the earnings portion.
- Impact on Financial Aid: Funds in a 529 plan are considered parental assets, which could slightly reduce financial aid eligibility.
A fiduciary financial advisor can help you mitigate these drawbacks and create a plan that balances savings with other financial priorities.
Why Work with a Fiduciary Financial Advisor?
A fiduciary financial advisor acts in your best interest, offering unbiased advice to help you make informed decisions. They can:
- Analyze your financial situation and determine how a 529 plan fits into your overall strategy.
- Identify ways to maximize tax advantages and minimize financial aid impact.
- Regularly review and adjust your plan as your family’s needs evolve.
Take Action: Secure Your Family’s Future Today
529 plans are more than just a way to pay for college—they’re a versatile tool for funding a wide range of education-related expenses. To ensure you’re taking full advantage of their benefits, it’s essential to have a solid financial plan in place.
Call to Action:
Connect with a fiduciary financial advisor today to explore how a 529 plan can support your family’s education goals. Take the first step toward securing your child’s future with a strategy designed just for you.
Global View Capital Management (GVCM) is an affiliate of Global View Capital Advisors (GVCA). GVCM is a SEC Registered Investment Advisory firm headquartered at N14W23833 Stone Ridge Drive, Suite 350, Waukesha, WI 53188-1126. 262.650.1030. Ryan Peca is an Investment Adviser Representative (“Adviser”) with GVCM. Additional information can be found at www.adviserinfo.sec.gov Global View Capital Insurance Services (GVCI) is an affiliate of Global View Capital Advisors (GVCA). GVCI services offered through Experior Financial Group, ASH Brokerage, and/or PKS Financial. GVCI is headquartered at N14W23833 Stone Ridge Drive, Suite 350, Waukesha, WI 53188-1126. 262-650-1030. Ryan Peca is an Insurance Agent of GVCI.
These views do not necessarily represent the views of GVCM or any of its affiliates. Investment involves risk.