In today’s world, where the price of a bachelor’s degree can rival that of a single-family home, having a 529 college savings plan can offer young parents peace of mind. It’s easy to enroll, either on your own or through a financial advisor, and once you’re signed up you can set up automatic contributions to fund the account. Your investment grows tax-free, and won’t be taxed when you withdraw, as long as the money is used to pay for qualified education expenses.
Beyond the double benefit of tax-deferred investment growth combined with tax-free withdrawals for qualified expenses, there are a number of advantages to saving in a 529 account. A brand-new benefit as of January 1, 2018 is you can now use 529s to save for private school tuition for kindergarten through 12th grade. This provides tax savings for parents who plan to send their kids to private school. You can withdraw up to $10,000 per year, per student for this purpose. Additionally, you can set up an unlimited number of plans, and there are no rules on who the beneficiary can be. This means you can create an account for a relative, friend, or yourself. The gift of education is one that will open doors to a world of opportunity and is sure to last a lifetime.
For many new parents, receiving a college fund as a baby gift packs a stronger punch than a new toy or baby bib. “Giving the gift of higher education is really amazing,” says Lucas Minor, Interim WA529 Director. “An entire family can participate. When someone is saving for your child’s future and cares about your child’s success, it reduces barriers and encourages kids to grow up with the incentive and expectation to attend college.” When opened for a newborn baby, the account has 18 years to grow, with interest compounding on interest, making it an especially savvy present for money-minded gift-givers. by Kelly Lenihan
RESOURCES
Compare Washington 529 Plans
There are two types of 529 plans: prepaid tuition plans and education savings plans. Explore both options to find the right plan for you.
GET 529 Prepaid Tuition Program
The GET prepaid tuition plan lets a saver or account holder purchase units or credits at participating colleges and universities (usually public and in-state) for future tuition and mandatory fees at current prices for the beneficiary. Enrollment period: November 1, 2018 through May 31, 2019.
get.wa.gov | 800.955.2318
DreamAhead 529 College Investment Plan
The DreamAhead education savings plan lets a saver open an investment account to save for the beneficiary’s future qualified higher education expenses – tuition, mandatory fees and room and board. Withdrawals from education savings plan accounts can generally be used at any college or university, including some non-U.S. colleges and universities.
dreamahead.wa.gov | 844.529.5845