What is a 529 Plan?
A 529 Plan is a tax-advantaged investment account that encourages saving for future education expenses of a designated beneficiary.
There are currently two versions of the 529 plan, A Savings plan and a Prepaid-Tuition Plan.
A Savings plan allows deposits to be invested in the market and grow tax-deferred with withdrawals being tax free if they are used for qualified educational expenses. It can cover K-12 qualified expenses as well as qualified expenses for Trade School and Higher Education.
The Pre-paid tuition plan allows the account holder to pay in advance the tuition as designated colleges and universities. This allows the account holder to lock in the cost of education at Today's rates.
Most states offer 529 plans that are run by the state the account holder resides. Since Texas does not have a State Income Tax, Thieman-Stinnett can offer its Texas clients plans from other states that may be better suited for your needs.
Each plan has its own rules and advantages. To learn more about saving for your children's education, call us at 325-655-5520 or you can reach us by clicking the Contact Us link above.
To get an idea on how much you should save for your kid's education we have provided a link below to our Education Savings Calculator