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Overall Benefits of the 529 College Savings Plan

Saving for college can be scary. There are so many options available, and this can make it hard to choose which plan is best for you. One of the best ways to determine which type is right for you is to compare the benefits of each. One of the most popular plans is the 529 savings plan, and this plan offers many benefits. Just a few of the many benefits achieved by people who invest in the 529-college savings plan include the following:

You get to save with pretax dollars. This is the top reason for investing in any college fund, and it can save a bundle over the long-term.

You have options. Since there are two types of plans, you get to pick the best way to invest your money. You can either buy tuition credit (which allows you to purchase college time for the future at today’s prices), or it can be a simple savings set up for college. This type of 529-college savings plan is based on many types of investments—largely mutual funds.

There are more opportunities for additional funds. This includes the potential for matching scholarship and grants that you only have access to through your 529 plan.

Creditors cannot touch the funds. Unlike other types of investments or savings accounts, a 529-college savings plan is untouchable by creditors, which ensures that your child will be able to use this money for college no matter what.

During financial aid calculations, this account is not included. If you were to invest the exact same amount of money in a traditional savings account or another investment tool, it is included as part of your assets or earnings. However, the 529 plan is not, which means you have access to more financial assistance for funds.

The beneficiary does not have to stay the same. One of the biggest fears when investing in college fund accounts is that the intended child will not want to go to college when they get old enough. This is why the 529 plan allows the beneficiary to change whenever the need arises. You can switch the funds to one of your other children or even a relative who needs the money for college.

Each individual state operates its own plan. This means that it has protection from federal taxes, as well as state income and asset taxes. This also allows you to choose which state you want to invest in, but most of the time; the plan will offer added incentives for you to invest in your own state’s program.

The account does not limit where the child must attend school. There are over 8,000 schools in the United States that will allow use from these funds, so your child will still have options when it comes to which school they want to attend.

You retain control of the funds. Unlike some types of college investments, such as bonds, your child does not gain control at any age, allowing you to use the money where you see fit. This includes tuition, books, dorm fees, and more.

It allow for all income levels. There are low minimums required as monthly deposits, so virtually anyone can afford to contribute to this type of account.

As you can see, there are many benefits of the 529-college savings plan. By using a program with this many benefits, you will be able to save your child’s future education while enjoying the tax benefits in the present too. Since so many people cannot afford to live only for the future, this is one of the most prominent benefits of all.