Insights

Securing Your Child’s Future with a 529 plan

05.29.24


Setting up a successful future for your child can be made easy with a 529 plan, a tax-advantaged savings plan designed to cover future education costs.

Why choose a 529 plan?

529 plans are designed to offer an affordable and uncomplicated way to help families save for education. While tax advantages are a big benefit, states offer other features to help families reach their goals. Not only are the savings grown free from federal income tax when used for qualified education expenses, but withdrawals for qualified expenses are also tax-free.

There can also be state tax benefits such as deductions or credits, depending on the plan you select. Plus, these plans are not just for 4-year colleges – they cover community colleges, technical schools, and registered apprenticeships*.

How do you choose a 529 Plan?

Choosing the right plan can be daunting, but our team at MAI is ready to guide you. Essential considerations include annual return on investment, fees, the type of plan (direct-sold or advisor-sold), tax benefits, investment options, and minimum contributions. Our advisors can help you analyze these factors to find the most appropriate fit for your family. While consulting with your financial advisor can be beneficial, you can also use online tools, like this one, to compare plans.

How MAI Can Help with 529 Planning

Recently, we had a client who became a grandparent for the first time and wanted to open a 529 plan for their new grandchild. They were uncertain about how much to contribute. Our planning group calculated what a one-time deposit should be for both a state school and a private school. We also reminded them of the special gifting rules for one-time deposits into 529 plans.

Similarly, another client, who already had 529 plans established for their two daughters, sought our advice now that they are in a cash flow positive mode. They wanted to determine an appropriate monthly contribution for one daughter planning to attend UNC-Chapel Hill and the other aiming for a private school. By working with the planning group and utilizing tools like WealthView/eMoney, they were provided comprehensive summary reports for education analysis which aided in their decision-making process.

Celebrate 529 day with us by investing in a plan that can provide for your loved one’s financial and educational success. Contact us today to start the journey of securing your child’s future journey.

* If the school is eligible to participate in a student aid program administered by the U.S. Department of Education.


Information updated as of May 29, 2024. Please send your questions, comments, and feedback to: info@mai.capital. The opinions and analyses expressed herein are subject to change at any time. Any suggestions contained herein are general, and do not take into account an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Distribution hereof does not constitute legal, tax, accounting, investment or other professional advice. Recipients should consult their professional advisors prior to acting on the information set forth herein. In accordance with certain Treasury Regulations, we inform you that any federal tax conclusions set forth in this communication were not intended or written to be used, and cannot be used by any taxpayer, for the purposes of avoiding penalties that may be imposed by the Internal Revenue Service.

We look forward to learning about your financial goals.

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