The 529 college savings plan, legally known as a “qualified tuition plan”, is a tax-advantaged savings plan introduced in 1996. It encourages saving for future college costs, and is sponsored by state agencies and educational institutions.

Who Can Apply?

Any U.S. citizen or resident alien who is 18 years old or older can open an account. The beneficiary can be a child, younger relative, or grandchild. AOG Wealth Management, your experienced advisor for investment management in Washington, DC and Northern Virginia, also recommends this plan for adults for their own higher education costs.

Does It Offer Tax Benefits?

Making the most of a college savings plan offers special tax benefits. Your earnings will not be affected by federal tax. For state tax exemptions, you must have withdrawals for eligible college expenses.

How Different is the Prepaid Tuition Plan and the College Savings Investment Plan?

The college savings plan is a type of investment plan under the 529 federal tax code. Another type of plan is the prepaid tuition plan. This plan locks in tuition prices at eligible schools and universities, covering tuition and mandatory fees only. It also has an age or grade limit and has a limited enrollment period.

The college savings plan will fit your asset management planning in Washington, DC and Northern Virginia, because it covers all qualified higher education costs. They include tuition, boarding, necessary books or computers, and mandatory fees. The college savings plan also does not impose age limits and is open for enrollment all year long.

Where Can You Spend the College Savings Plan?

Savers can apply their plan in most accredited colleges, graduate schools, and professional and trade schools. Keep in mind that plans vary from state to state, so be sure to check the list of corresponding fees covered.

What Policies Should You Be Aware of?

The federal government enforces policies on all 529 plans. Only one person can own a 529 account, which can have only one beneficiary. If you want to have multiple accounts, the sum of all accounts must not exceed the state maximum limit on contributions.

If you need assistance for your McLean asset management needs, you can count on AOG Wealth Management. We specialize in college savings plans as well as financial planning. We can also help small business with their 401(k) plan.

Call us today at (866) 993-0203 so we can help you pave your way to financial success. You can also fill out our contact form.