A 529 college savings plan has distinct tax advantages at the federal level. Contributions grow free from federal income tax, provided the funds are used for qualified education costs. This feature can lead to meaningful savings over the life of the plan.
Another key benefit of a 529 plan is the flexibility in how the funds can be used. They can be used to cover tuition, room and board, textbooks, and other qualified education expenses. This flexibility helps alleviate the financial burden of education costs. It is important to note that withdrawals used for non-qualified expenses are subject to federal income tax and a 10% federal penalty on the earnings portion of the withdrawal.
With a 529 plan, there’s flexibility in how you contribute. Whether you choose superfunding, which allows you to contribute up to five years’ worth of annual gift tax exclusion amounts in a single year, or annual funding, we can help you determine an approach based on your financial situation and goals.
Preparing for your child’s future education costs can seem daunting, but with EWA, you’re not alone. Our team of financial advisors is here to guide you through the process, helping you understand how a 529 plan can fit into your overall financial plan. Whether you’re in Dallas, TX, Charlotte, NC, or anywhere else in the U.S., we’re ready to assist you. To get started, contact us at (412) 896-7148 or request an appointment online today.
Important Disclosures
Equilibrium Wealth Advisors (EWA), LLC is a registered investment adviser with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training.
529 plans are investment products that involve market risk, including the potential loss of principal. There is no guarantee that a 529 plan will grow to cover education costs. Plan values will fluctuate with market conditions.
The tax advantages of a 529 plan depend on individual circumstances. Contributions grow free from federal income tax when used for qualified education expenses. State tax treatment varies by state and plan. Withdrawals for non-qualified expenses are subject to federal income tax and a 10% federal penalty on the earnings portion. Consult a qualified tax professional for advice specific to your situation.
A 529 plan may impact a student’s eligibility for need-based financial aid. Contribution limits, investment options, and plan rules vary by state. Before investing, consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program.
For more information about EWA’s services, fees, and business practices, please refer to our Form ADV Part 2A and Form CRS, available at adviserinfo.sec.gov or upon request.
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Important Disclosures:
Securities and advisory services offered through EWA LLC dba Equilibrium Wealth Advisors (a SEC Registered Investment Advisor).
* Contents for information purposes only and nothing herein shall constitute an offer to buy or sell securities, nor does it amount to tax, legal or investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
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