Financial planning experts broadly agree that investing in a 529 plan is an advisable move for parents across the wealth spectrum who are determined to provide their children with an opportunity to pursue higher education.
The plans offer flexibility, tax advantages and a proven track record of helping families save for education costs. The accounts also come with a degree of complexity, however, and understanding the nuance is critical in leveraging their full potential — especially as the rules and regulations for their use evolve.
For clients, time is a significant ally in saving for education, and the earlier the contributing starts, the more opportunity for investments to grow. For advisors, expertise in education planning is one of many service areas that can help them deliver more holistic and responsive service to increasingly discerning clients, particularly in the mass affluent and high-net-worth arenas.
At the very least, advisors must be able to connect their clients with education planning resources. Advisors seeking more insight on 529 plans (and many other tax-related topics) can also reference ThinkAdvisor’s Tax Facts library.
See the accompanying slideshow for a review of 11 common 529 plan questions, asked and answered, drawn from a longer FAQ published by the College Savings Plans Network.
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