PERSONAL & BUSINESS WEALTH DESIGN
Saving for College with Advantage Investment Management
Educational costs have been increasing at a rate greater than the general level of inflation for more than a decade. While we cannot control these increasing costs, we can more effectively save using the right type of savings plan.
One of the most popular types of products are 529 Plans, which are tax-advantaged savings vehicles for higher education costs. There are two types of plans: Prepaid Tuition Plans and Tuition Savings Plans. Prepaid Tuition Plans, which are available in some states, provide a guarantee that the value of the account will increase at the same rate as tuition. This allows a contributor to prepay a child's college tuition at, or close to, today's prices. In Tuition Savings Plans, growth is based upon the market performance of the investments in the plans.
There are benefits to 529 plans that are very attractive to parents and grandparents and are also unique among ways to save for college. Beneficiary changes on 529 plans are permitted between certain family members should the beneficiary decide not to attend college or should surplus funds remain in the account after funding the expenses. If ultimate distributions exceed qualified expenses, however, or the donor makes withdrawals for non-qualifying purposes, earnings are subject to income tax with a 10% additional penalty tax imposed.
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ADVISORY SERVICES OFFERED THROUGH GARTON & ASSOCIATES FINANCIAL ADVISORS, LLC DBA ADVANTAGE INVESTMENT MANAGEMENT, A REGISTERED INVESTMENT ADVISOR.