Expert shares creative way to fund your child’s 529 plan
On average, Americans have saved $28,953 in their 529 accounts
InvestigateTV - Parents have opened nearly 16 million 529 plans, which are tax-advantaged savings accounts that can be used to pay educational expenses from kindergarten through graduate school.
But during times of high inflation, many families have higher financial priorities than saving for their child’s college education.
That’s why Robert Farrington, the founder of The College Investor, likes to remind parents that funding that account doesn’t have to come from their own pocket.
“This is where other people in your family or friends can give into your child’s 529 plan,” Farrington explained. “And we’re seeing this trend take off where families instead of hosting birthday parties with you know, 20 kids and 20 gifts they’re saying in lieu of gifts please contribute to our child’s 529 plan.”
He said most states’ 529 plans let you create a link with your child’s name you can send to others so they can donate directly into the account.
Some states offer tax deductions and tax credits for contributing to a 529 plan. In some cases you can even get a tax break for saving for your children’s education.
CollegeSavings.org has free information and resources on 529 plans, including links to help you find your state program.
Copyright 2023 Gray Media Group, Inc. All rights reserved.