MYRTLE BEACH, SC (WBTW) – Financial planner Justin Cramer with Pyle Financial Services joined News13 Now at 9 a.m. on Wednesday to talk about 529 college savings plans. Watch the video to hear Cramer’s explanation of the plans and also what he believes you should consider if you’re deciding whether to save for retirement or college.
The following are 5 reasons to consider a 529 plan, according to futurescholar.com:
- Grow your college savings free from taxes
Saving in a Future Scholar account helps you keep more money for actual college expenses. That’s because the money in your account is not taxed as it grows. And when you need the money for college costs, you can withdraw it tax-free. If you live in South Carolina, you may get even more tax advantages. You may be able to deduct your contributions to your Future Scholar account(s) from your South Carolina state income taxes. In addition, you’ll pay no state income tax when you use the money for college expenses.
- You’re in control
Future Scholar is all about choices. You decide when, where and who can use the money you save, even after your child turns 18. Your child also has choices when the time comes to decide which college to attend. They can use their savings at a variety of schools in the US or internationally. If your child doesn’t need the money because they receive a scholarship or they decide not to attend college, you can transfer the account to another beneficiary or leave the money in your account for future use. In addition, you can choose an investment strategy that makes sense for your individual needs – whether you’re investing for a baby, an older child or even your own education.
- Low impact on financial aid
When it comes time to apply for financial aid, only a small percentage of the account’s value (currently 5.64% or less) is factored in when determining your expected family contribution and financial aid each academic year.
- No income or age limits
Anyone can open a Future Scholar account, regardless of age or income. You can set up an account for a child, teenager or even an adult.
- High contribution limit
Future Scholar’s high contribution limit gives you the flexibility to help meet the cost of college. Family and friends can also establish Future Scholar accounts for the same child, as long as the total of all accounts is not more than $400,000 per beneficiary.