Can You Benefit From a 529 plan? – EDWARD JONES

Written by on April 27th, 2023

Another school year is coming to a close. If you have young children, they’re now a year closer to heading off to college or some other type of post-secondary education or training. How can you prepare for these costs?

One popular tool is a 529 education savings plan. With a 529 plan, your earnings can grow tax deferred and withdrawals are federally tax free when used for qualified education expenses. Depending on where you live, you may also be able receive some state tax benefits.

In recent years, new tax legislation has allowed 529 plans to be used for purposes beyond college. In some states, you can use a 529 plan for K-12 expenses. It can also be used for approved apprenticeship programs and to pay back student loans, within limits.

Starting in 2024, unused 529 plan funds may be eligible to roll over to a Roth IRA for the designated beneficiary. Some restrictions apply. If you are considering a rollover, you’ll want to consult with your tax advisor to determine if you are eligible.

A 529 plan has a lot to offer — and it might be something to consider for your family’s future.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor, Casey Caliva, at Historical 30th & Fern. 

Withdrawals used for expenses other than qualified education expenses may be subject to federal and state taxes, plus a 10% penalty. Make sure to discuss the potential financial aid impacts with a financial aid professional.

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