Leonard Sloane, Wall Street Journal, 07.03.20
Some great extra flexibility has been added to 529 plans.
This is a common question that can cause parents to hesitate to contribute to a 529 plan. The article outlines how flexible these accounts are for funding education but fails to address what happens if a worthy educational use of the funds is no longer available. In that case you may want to just withdraw the funds for personal use. Well, first remember that only the gains in the account will be taxed (like a tax deferred IRA withdrawal) and penalized 10%, while the money you contributed comes out tax and penalty free. In many scenarios, the benefit of tax deferral on the gains can offset much or all of the penalty amount, leaving you with an account generating after-tax returns in the same ballpark as an ordinary brokerage account. A good advisor can help you run the numbers and probabilities to assess if this is likely for your situation.
Cheryl Winokur Munk, Wall Street Journal, 02.10.19
If your child expects to receive private scholarship or grant money for college, make sure they ask each school about their scholarship displacement policies.
Mark Kantrowitz, Savingforcollege.com, 08.17.18
“Be careful to avoid this pitfall in the tax code!”
Mark Kantrowitz, Savingforcollege.com, 07.24.18
While 529 accounts and Roth IRAs share many characteristics, they also have significant differences, both for taxation and college funding purposes. This article provides a good side by side comparison.
Kathryn Flynn, Savingforcollege.com, 03.14.18
You need to be strategic with your plan to pay for college. If possible, use a grandparent owned 529 at the end of college.
Sean Speers, USA Today, 01.06.16
A good resource for parents planning how to finance a college education.
Kathryn Flynn, Savingforcollege.com, 07.07.2015
Saving for college is one of the most anxiety inducing topics I come across. 529 plans are very efficient ways to save for college costs — in terms of both taxes and the way family income is measured (see #2). Don’t let sticker shock (disgust?) prevent you from saving at least a small amount as early as possible.
Troy Onink, Forbes, 02.14.2014
Detailed article on how your various income producing assets impact college aid eligibility. Good points regarding early admissions, which assets are counted as parental assets, and distributions from grandparent owned 529 plans.