As part 529 College Savings Day (taking place later this month on May 29), we are taking the opportunity to look at the top five myths associated with 529 plans.
According to James DiUlio, director of the Wisconsin 529 College Savings Program, “Saving for college shouldn’t be a confusing or overwhelming process. It’s important to know the common myths about 529 savings plans so you can understand their value.
“There are also a number of great resources, including college saving calculators and frequently asked questions, on Edvest.com which are helpful in grasping the importance of saving for the costs of a higher education.”
Myth #1: It’s too late to start a 529 plan.
It’s never too late to start a 529 plan. Even if your student is in high school or you are planning to enroll in classes soon, you can still take advantage of the tax benefits of a 529 plan. In addition, the more you are able to save now, the less you (or they) will have to borrow later.
Myth #2: Edvest can only be used for Wisconsin colleges and universities.
Edvest funds can be used at eligible colleges, universities, graduate schools (including law and medical), technical colleges, and certificate programs throughout the United States as well as many international colleges and universities.
Myth #3: If the child I’m saving for doesn’t go to college, I’ll lose my money.
Unlike other college savings options, as 529 plan account owner, you control your account. This means you have the flexibility to change your beneficiary to another eligible “member of the family” (per plan rules) with no tax penalty.
Myth #4: Investment decisions are complicated.
Whether you prefer a one-step or do-it-yourself strategy, 529 plans generally offer several investment types that can meet your level of investment comfort. Edvest’s one-step strategy is a simple age-based option where your investment becomes more conservative as your beneficiary gets closer to college age. Our do-it-yourself strategy offers a range of individual portfolios that allow you to create your own investment plan.
Myth #5: A 529 plan is only for kids.
Have you been considering career change that requires retraining or earning an advanced degree? There’s no maximum age for a 529 plan. As long as the school you select is eligible, you can use your 529 plan assets even if you’re not enrolled full-time.