College Planning

When we decide to become parents the present is what we focus on along with doing the right thing, making the right choices, being great moms and dads and saving for a good college education. Then, life happens and we put things off despite our good intentions.  It is those detours we have no control over that come straight out of nowhere and takes us by surprise. 

There are three basic misconceptions in regards to college planning:

Why start now if I didn't when they were first born?

I make too much to qualify for assistance.

By the time my child reaches their preteens, the cost will be so exorbitant no amount of savings will help me.

Never say never because you can still make a difference starting today.

The time to begin is now and we’re here to take away all the fears, answer every question that is keeping you awake nights and show you the solutions available for you personal situation.

What is Available?

529 Plans

529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1996.  They can be used to meet costs of qualified colleges nationwide. In most plans, your choice of school is not affected by the state your 529 savings plan is from. You can be a CA resident, invest in a VT plan and send your student to college in NC.  

Every state now has at least one 529 plan available. It's up to each state to decide whether it will offer a 529 plan (possibly more than one) and what it will look like, meaning 529 plans can differ from state to state. There are two types of plans: 

Savings Plans work much like a 401K or IRA by investing your contributions in mutual funds or similar investments. The plan will offer you several investment options from which to choose. Your account will go up or down in value based on the performance of the particular option you select.

​You can find out more about 529 plans at the J.P. Morgan New York's 529 Advisor Guided 529 College Savings Plan website by clicking here.

What Are The Benefits?

Federal tax benefits

Although your contributions are not deductible on your federal tax return, your investment grows tax-deferred, and distributions to pay for the beneficiary's college costs come out federally tax-free. The tax-free treatment was made permanent with the Pension Protection Act of 2006.

State tax benefits

Your own state may offer some tax breaks as well (like an upfront deduction for your contributions or income exemption on withdrawals) in addition to the federal treatment. 

Donor retains control of funds

You, the donor, stay in control of the account. With few exceptions, the named beneficiary has no rights to the funds. You are the one who calls the shots; you decide when withdrawals are taken and for what purpose. Most plans even allow you to reclaim the funds for yourself any time you desire, no questions asked. (However, the earnings portion of the "non-qualified" withdrawal will be subject to income tax and an additional 10% penalty tax). Compare this level of control to a custodial account under the Uniform Transfers to Minors Acts (UTMA) and you will find the 529 plan gives you much more say in how your investment is used!

Low maintenance

Third, a 529 plan can provide a very easy hands-off way to save for college. Once you decide which 529 plan to use, you complete a simple enrollment form and make your contribution (or sign up for automatic deposits). Then you can relax and forget about it if you like. The ongoing investment of your account is handled by the plan, not by you. Plan assets are professionally managed either by the state treasurer's office or by an outside investment company hired as the program manager.

Simplified tax reporting

You won't receive a Form 1099 to report taxable or nontaxable earnings until the year you make withdrawals.


If you want to move your investment around you may change to a different option in a 529 savings program every year (program permitting) or you may rollover your account to a different state's program provided no such rollover for your beneficiary has occurred in the prior 12 months. Hint: There is no federal limit on the frequency of these changes if you replace the account beneficiary with another qualifying family member at the same time.

Substantial deposits allowed

Everyone is eligible to take advantage of a 529 plan, and the amounts you can put in are substantial (over $300,000 per beneficiary in many state plans). Generally, there are no income limitations or age restrictions.

Give Us A Call Today!

518-434-4383 ~ 800-207-5076