Page 53 - Book2E

• There are flexible investment choices.
• Funds can be used for elementary, secondary, and higher education qualified expenses.
• Anyone who meets the income requirements can contribute to the account, including aunts, uncles, grandparents, friends, and even the beneficiary.
• If the designated beneficiary doesn’t use all the funds, the remaining funds can be changed to any other family member younger than 30 years old. Qualifying family members include: Son/daughter, stepson/stepdaughter, brother/sister, stepbrother/ stepsister, father/mother, stepfather/stepmother Niece/nephew, any in-law, spouse of any of the above, and first cousins
Drawbacks:
• Contributions cannot be made after the beneficiary turns 18.
• If the beneficiary applies for financial aid, the account funds are considered an asset for the beneficiary.
• Funds must be withdrawn before 30 days after the beneficiary’s 30th birthday or be switched to another beneficiary.
• If the funds are not used for education expenses, the earnings are treated as ordinary income and may also be subject to a 10% penalty.
• You will have control over the account only until the beneficiary reaches his or her 18th birthday.
• The beneficiary is then free to use the funds as he or she sees fit.
2 . 529 Savings Plan: This is a plan that is provided by all 50 of the United States. It is intended to allow you to prepay or to contribute to an account established for the beneficiary’s expenses at a pre-established higher education institution. You should check with your bank or with
There's More to an Education
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