As higher education costs continue to soar, many parents find themselves faced with the nagging question, “Will I have enough money to pay for my child’s college education?” Although most people today are likely to agree that an investment in higher education usually reaps its rewards in higher long-term earnings — and, hopefully, greater job satisfaction—one key concern is how to choose a smart savings alternative. 529 plans are flexible investment options with tax benefits.

These state-sponsored plans offer attractive tax benefits and allow you to contribute substantially higher sums than with other savings vehicles and custodial accounts. The funds may generally be used for any “qualified” higher education expense, including tuition, room, board, fees, books, supplies, and equipment. You don’t necessarily need to be a resident of a state to participate in its 529 plan. In some states, you may even name yourself as the beneficiary, if you are planning to further your education sometime in the future. However, participation does not guarantee admission to college — the prospective student will still have to meet the school’s entrance requirements.

Thinking about setting up a 529 College Education Plan? Contact us today!

529 plans offer no guaranteed rate of return. Out-of-state plans may have in-state income tax ramifications. Always ask for, and refer to, the program description for complete information, including risks, fees, and expenses. Read it carefully before investing. Distributions not used for qualified expenses will be subject to taxation and a 10% penalty.

Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents and taxpayers.  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.  Non-qualified withdrawals will be subject to federal income tax, and the tax will typically be assessed at the account owner’s rate, not at the beneficiary’s rate.  Plus, the earnings part of a non-qualified withdrawal will be subject to a 10 percent federal penalty and possibly a state penalty too.


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All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.

*Securities and advisory services offered through Commonwealth Financial Network®, /, a Registered Investment Adviser. Fixed insurance products and services offered through Paris International are separate and unrelated to Commonwealth. This communication is strictly intended for individuals residing in the states of AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY. No offers may be made or accepted from any resident outside these states due to various state requirements and registration requirements regarding investment products and services.

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