Women's Money Wisdom

Episode 170: The Case for 529 Plans for College Savings with Ann Garcia

May 30, 2023 Ann Garcia, CFP® Season 3 Episode 170
Women's Money Wisdom
Episode 170: The Case for 529 Plans for College Savings with Ann Garcia
Show Notes

In this episode Melissa Joy, CFP, ® and Ann Garcia, CFP®, a financial advisor and author of the popular College Financial Lady blog, discuss why a 529 plan is a great vehicle for college savings. They cover everything from asset weighting on the FAFSA form, flexibility on what colleges your child can attend, and how they help maximize tax savings. Did you know if your 529 is overfunded because your student got a scholarship, you don’t pay the penalty on withdrawals of the amount that is overfunded due to the scholarship, only taxes on the gain?   If you have a child who may attend college some day, this is a must listen episode to help plan financially.

You will learn:    

  • The benefits of 529 plans and why they are an excellent option for funding higher education.
  • Explanation of what 529 plans are and how they differ from other college savings options.
  • Tax advantages of 529 plans, including tax-free growth and potential state tax deductions/credits.
  • Flexibility of 529 plans, allowing for changes in beneficiaries within the family and use for K-12 tuition.
  • Importance of earmarking funds specifically for college to maintain focus on savings goals and eligibility for financial aid.
  • How assets are weighted on the FAFSA, with 529 plans being treated as a parental asset with a maximum of 5.64% factored into the EFC.
  • Encouragement to start saving for college early to benefit from compounding and time.

Resources:

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