If you’re planning to attend college – or planning to help pay for the cost of a college education for a loved one – a great place to start saving is with a 529 Plan. 529 Plans are government-sponsored college savings programs designed to give folks a boost as they try to meet the ever-increasing financial demands of a college education. While JG Wentworth does not offer investment advice, we do encourage you to consider opening up a 529 Plan, which offers at least five significant benefits:
1) Income tax benefits
With a 529 plan, funds invested not only grow tax-deferred but also can be disbursed for college education federally tax-free. This represents substantial savings on both sides of the investment, freeing up more of your money to go where you want it – towards college – rather than towards taxes.
2) State tax benefits
Though 529 plans vary state by state, many states offer 529 participants additional tax breaks that can also represent significant bottom-line savings for college.
3) Funds can be used for many college-related expenses
While most folks use money saved from a 529 plan for tuition payments, the money can also be used for room and board, books, school supplies, and a wide range of other college-related costs.
4) 529 plans are easily maintained
To start a 529 plan, all you need to do is enroll in the plan – a process which takes only minutes – and then create an account to which you can either periodically or automatically make contributions. Additionally, the plan will always be in your name, meaning that you are the one who ultimately gets to decide whether to disperse these funds towards their intended purpose. If, for instance, the person with a 529 Plan has been created for decides not to attend college, the money goes back to you, though it would then be subject to standard tax rates.
5) 529 plans are the ultimate investment in the future
Last but certainly not least is the fact that investing in a 529 plan represents your firm commitment in what is traditionally one of the cornerstones of the American dream, that of a higher education. Study after study has affirmed that over the course of a lifetime college graduates earn more money, have more job security, and are more satisfied in their day to day employment, then non-college graduates. Dedicating your hard-earned money towards a 529 Plan shows your commitment to the future, and affirms the lengths you are willing to go to give yourself, or your loved one, access to the many great things this country has to offer.
Please note that this is just a short list of some of the benefits of a 529 Plan, and that J.G. Wentworth cannot make any specific financial suggestions. We do hope, however, that reading this blog will encourage you to further research a 529 Plan to see if it is right for you. And always remember that if you need cash now, and are tired of waiting for money from your future structured settlement or annuity payments to get to you, J.G. Wentworth is just a phone call away. For a free, no-obligation quote for your future payments, or to discuss your own unique financial situation, call us anytime at 877-227-4713.
Nothing above is meant to provide tax or financial advice. You should meet with appropriate professionals for such services.