Many families with children bound for private K-12 education, college or a vocational school are concerned about setting aside enough money for tuition. Investing in 529 education Savings Plans (529 plan) — tax-deferred investment plans operated by various states can help families save for the future costs of education.
529 plans (named for the section of the Internal Revenue Code that authorized the plans) allow you to contribute to an investment account set up specifically to pay your beneficiary's qualified education expenses, such as tuition, fees, books, supplies and room and board. Mutual funds are the most commonly used investment vehicles in these plans. Each plan typically offers an array of more than one investment option (stocks, bonds, etc.).
While the features vary among the states and institutions operating them, below are some of the benefits of saving for education using 529 plans.
One of the best investments for education savings may be the advice you receive from your Lincoln Investment financial advisor. Your Lincoln Investment financial advisor can help you evaluate different plans — and the investment options within those plans — to help you make the right selections for your situation and goals.
As with any education savings plan, the sooner you start, the sooner your investment may grow. Education has always been the backbone of Lincoln Investment's success and our goal is to help you plan wisely for your student's future.
Participation in a 529 Education Savings Plan (529 Plan) does not guarantee that contributions and investment return on contributions, if any, will be adequate to cover future tuition and other education expenses or that a beneficiary will be admitted to or permitted to continue to attend an educational institution. Contributors to the program assume all investment risk, including potential loss of principal and liability for penalties such as those levied for non-educational withdrawals.
An investor should consider, before investing, whether the investor's or designated beneficiary's home state offers any favorable state tax treatment or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Consult with your financial, tax or other adviser to learn more about how state-based benefits (including any limitations) would apply to your specific circumstances. You may also wish to contact your home state or any other 529 education savings plan to learn more about the features, benefits and limitations of that state's 529 education savings plan. Furthermore, the Tax Cuts and Jobs Act that was signed into law on December 22, 2017 allows for up to $10,000 a year per beneficiary in tax free distributions from a 529 Plan if used for tuition incurred for enrollment or attendance at a public, private, or religious elementary or secondary school. Check with your state's guidelines prior to withdrawing the funds. For more complete information, including a description of fees, expenses and risks, see the offering statement or program description.