College Savings Plan

 

With so many 529 plans to choose from, you’ll need to ask a lot of questions in order to select the best plan for you. You should also compare the benefits of the Florida Prepaid College Program.

Compare the plans offered by different states

If you’re interested in joining a college savings plan, you should consider all of your options. Compare the plans offered by different states in terms of flexibility, tax considerations, investment selection, contribution rules, and costs and fees. Any state that offers a 529 plan can provide you with a free packet of information that describes the program and its rules. You can also check out a plan’s website. Keep in mind that some states allow nonresidents to join their plans, and others don’t. The vast majority of states that offer college savings plans allow nonresidents to participate.

Consider the plan’s account ownership and beneficiary designation rules

When comparing college savings plans, keep plan flexibility in mind, particularly with respect to account ownership and beneficiary designation rules. These rules may vary from state to state. A college savings plan can be an expensive undertaking. And your child’s education is certainly important to you. As an account owner, you’ll want to make sure the account works the way you want it to work. Generally, the account owner retains ownership and a certain amount of control over the college savings plan account. For example, he or she can change the beneficiary of the account or terminate the account and receive a refund of contributions. However, keep in mind that if you terminate the account, you’ll typically receive back only a portion of your earnings, if any, and a penalty will generally apply, unless you terminate the account because the beneficiary has died or is disabled. Here are some questions to ask when researching various plans:

  • Can I own the account jointly with my spouse or another person?
  • Can a trust or other entity be an account owner?
  • Can I name a successor owner when I open the account? If not, what happens to the account when I die?
  • Must the account owner be a state resident? Must the beneficiary be a state resident?
  • What happens if the account owner or beneficiary later moves out of state?
  • Are account statements issued only to the account owner or also to the beneficiary?
  • Can I view the account on-line?
  • If I terminate the account, how much of my contributions and earnings will I get back, and will I pay a penalty?

Depending upon your state of residence, there may be an in-state plan that provides tax and other benefits not available from non-resident plans. Please consult your tax advisor for your particular situation.

For more information on our College Savings Plans contact one of our Regent Financial Services representatives at 954-786-5863.

Disclosure:
Regent Financial Services are available at 1540 South Federal Highway, Pompano Beach, FL 33062 or by appointment at a time and place of your convenience. Investments and insurance products and services are offered through Infinex Investments, Inc., Member FINRA/SIPC. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk including the possible loss of value.