529 Plans are a big piece of many of our client’s educational plans. While 529 Plans are not the sole educational planning tool, they are in my mind probably the best for most people. One point about 529 Plans that I really try to emphasize with families is that anyone can contribute to them. So parents, even though you might not be able to funnel monies into a plan other friends and family members can.
Adam Zell, assistant site editor over at Morningstar put together 6 Big Myths About 529 Plans. While I have only listed a few below, I can tell you the question that I get asked most often by parents is if they have to use the money within the state that they currently contribute in and the answer is no. 529 Plans can be used within any state private or public.
- You have to contribute to a 529 in your home state – FALSE
- If you save in a 529 account for your child, it will hurt his financial aid prospects – Possibly, but not as much as you might think
- All 529 plans are the same – Short answer is NO, take the time to look at not only performance but the potential tax implications and savings