The earlier your clients start saving, the less they may have to pay out of pocket for their children’s future education. A smart strategy includes a 529 College Savings Plan to help clients avoid or lower future debt and gain valuable tax benefits.

Many families make the mistake of viewing their retirement savings as a source to fund college education without realizing the potential harm they could be doing to their retirement plans down the road. But there is a strategy that recognizes the importance of saving for both college and retirement at the same time. In the same way families can make periodic contributions to their retirement plans, they can make regular investments1  for a child's college education in another tax-advantaged vehicle — 529 College Savings Plan.

Benefits of a 529 College Savings Plan include:

  1. Flexible investment options.
  2. Potential tax-free growth.
  3. Potential gains from compounded interest.
  4. The freedom to choose or change beneficiaries.
  5. Tax-free withdrawals if they’re used to pay for qualified education expenses2.
  6. Additional state income tax deductions, in certain states, if clients contribute to plans in their state of residence. Some states3 even provide state tax deductions for residents who invest in another state’s plan.

Learn More by Downloading our Educational Brochure.

1Systematic investing does not assure a profit and does not protect against loss in declining markets. Before investing, investors should evaluate their long-term financial ability to participate in such a plan.

2When withdrawals are used for non-qualified expenses, the earnings portion of the withdrawal will be subject to ordinary federal tax, any applicable state income tax and an additional 10% federal tax penalty.

3Tax parity states include Arizona, Kansas, Maine, Missouri and Pennsylvania.