10 Tips for Maximizing Your Financial Plan in 2023: Tip 9- 529 Plans

In tip number nine, Matt Blocki discusses the 529 college savings plan for maximizing your financial plan in 2023. He explains that contributions to a 529 plan are considered completed gifts and have a yearly contribution limit of $17,000 per child per spouse. Matt emphasizes the importance of 529 plans as part of a college savings strategy but not the sole component, highlighting some inflexibility issues.

He recommends funding these plans early, taking advantage of tax deferral benefits, and mentions the option for a five-year acceleration, where each spouse can contribute $85,000 upfront per child or $170,000 as a family, which can help fulfill long-term college savings goals.

Video Transcript

Hello, Matt Blocki with EWA. Today we are talking through ten tips for 2023 and how to maximize your financial plan. Tip number nine in maximizing your financial plan for 2023 is 529 college savings plan.

So in 2023, any contribution to a 529 plan would be considered a completed gift. So these really fall into a per child per year contribution limit per spouse again of 17,000 a year. So if you have one child, call child one and two spouses, spouse A and spouse B, spouse A can do 17 and then spouse B could do 17 as well.

Now, we have a college planning video that has a very clear philosophy on why we think 529 plans are a very important part of the college plan, but should not be the only part of the college plan because of some inflexibility.

It has to be used for college. There’s some timing issues has to be used for tuition, it can’t be used to pay off loans if the stock market is not ideal while the child’s in college. So we’re big fans of 529 plans, but not for all of the plan for part of the plan plan.

So it is smart to fund these sometimes it’s smart to fund these early because of the tax deferral. So get those maximums in there and you can also do a five year acceleration into these. So each spouse can put in 85,000 each or 170,000 total as a family per child all up front, which would probably fulfill the goal that we would recommend having the 529 plan at the end.

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Playlist

10 Tips for Maximizing Your Financial Plan in 2023

10 Tips for Maximizing Your Financial Plan in 2023: Tip 1- 401ks and 403bs
10 Tips for Maximizing Your Financial Plan in 2023: Tip 2- Roth IRAs
10 Tips for Maximizing Your Financial Plan in 2023: Tip 4- Allowable Income for 401k and 403b
10 Tips for Maximizing Your Financial Plan in 2023: Tip 3- Traditional IRA Planning
10 Tips for Maximizing Your Financial Plan in 2023: Tip 5- Social Security Tax
10 Tips for Maximizing Your Financial Plan in 2023: Tip 6- HSA's
10 Tips for Maximizing Your Financial Plan in 2023: Tip 7- Tax Bracket Management
10 Tips for Maximizing Your Financial Plan in 2023: Tip 8- Estate Planning
10 Tips for Maximizing Your Financial Plan in 2023: Tip 10-Standard Deduction

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