To help pay for your children’s college education, you might want to consider contributing to a tax-advantaged 529 education savings plan. But first you’ll want to better understand some of the myths surrounding these plans.
Here’s myth No. 1: You need a lot of money to invest in a 529 plan. Actually, you can invest small amounts on a monthly basis.
Myth No. 2: If your child doesn’t use the plan, you’ll lose the money you’ve invested. But in reality, you can switch beneficiaries to another eligible family member.
Myth No. 3: A 529 plan eliminates financial aid opportunities. This isn’t necessarily true. Several factors determine financial aid packages – and building significant assets in a 529 plan could outweigh the potential loss of some needs-based financial aid.
Before investing in a 529 plan, study its program description, which lists investment options, fees, risks and other key information. Also, check with your tax advisor before investing, as tax issues for 529 plans can be complex.
But don’t let “myths” scare you off from one of the best college-savings vehicles.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, its financial advisors and employees cannot provide tax or legal advice.