find out why 5/29 is a great day to think about a college savings plan!
Rob Menz of RJM Financial tells us why:
Guess what day it is!
That's right, it's May 29th, or 5/29, also know as National 529 College Savings Plan Day!
So what is a 529 Plan, and why open a one for your child now, when college is soooo far away?
1. Contributions to a 529 plan grow tax deferred, and if used for higher education purposes (tuition. room and board, books, laptops, travel to and fro...) are accessible tax free.
2. You can contribute up to $14,000 per year per child, or $28,000 per couple per child, or start as little as $50/month. Your choice.
3. College costs are not decreasing as time passes.
4. Anyone can contribute: parents, grandparents, aunts, uncles, friends... have a birthday party and accept 529 funds instead of toys. The limit is per contributor, not per child.
5. You maintain control of the funds, not the child, the plan or the potential school. If little one gets a scholarship, or becomes a pro baseball player out of high school, you can transfer the account within the family, to a brother, sister, even cousin. If no one goes to college, you can access the funds, have a nice built up amount, and only have to pay the taxes. So if your rascal of a son isnlt taking care of business for your grand kids, take charge!
6. The investments are managed by your favorite Neighborhood Financial Advisor, me, typically through the American Funds 529 Plan options, the largest 529 in the country.
7. It's the right thing to do.
Quick example of the power of compounding, tax free growth:
Starting from 0, $100 per month at an assumed 7% growth over 18 years will provide $49,683.91 for college. If you increase that to $200 you'll have $99,367.
Play with the numbers yourself at the link below. It's fun.
More 529 Plan info from our friends at the IRS: http://www.irs.gov/uac/529-Plans:-Questions-and-Answers
Let me know if you have any questions or want to open a 529.
Happy 529 Day!
Contact Robert Menz via his information below:
RJM Financial Group and NPC
Your Neighborhood Financial Advisor
Financial Advisor / Life Insurance
CA Insurance License: 0F47313
3901 Los Feliz Blvd. Suite 301
Los Angeles, CA 90027