May 29 (5/29) is recognized as National 529 College Savings Plan Day
A 529 can be a powerful way to take advantage of tax benefits to save for not just college but K-12 education expenses as well. According to a recent study by Edward Jones, only 18% of Americans are using a 529 plan and 66% were not familiar with a 529 at all.
Most respondents to the study said they would rely on personal savings accounts, scholarships and student loans to cover future education costs. Many people leave themselves vulnerable by relying on things that are not guaranteed, like scholarships and Federal or State financial aid. Student loan debt is a growing problem that has proven to be a bigger challenge than most have anticipated. In fact of those with student loan debt, 62.5% are over the age of 30. This shows that student loans are not typically paid off soon after graduation. They have a way of sticking around for many years.
Those who stand to benefit the most from 529 plans are parents with young children, because they have a longer time horizon to take advantage of the tax free growth. However, anyone with a student heading to college some day could profit from the tax benefits of a 529.
If you would like to learn more about 529 plans and if they are right for you, please call our office.