The Benefits Of 529 College Savings Plans: Busting Myths And Maximizing Value [Forbes]
Wells Fargo & Company (WFC)
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Source: Forbes
However, I've encountered many clients who worry about potential drawbacks, such as penalties, fees, or financial aid impacts. These concerns are often overblown or misunderstood, which is why in this article, we'll bust some common myths and highlight the real benefits of a 529 plan. getty Introduction: What Is a 529 Plan? A 529 college savings plan is a tax-advantaged investment account designed to help families save for future education expenses. The beauty of the 529 plan lies in its flexibility, tax-free growth, and potential estate planning benefits. Whether you're saving for your children or grandchildren, a 529 plan offers unparalleled benefits for funding education. Myth #1: High Taxes and Penalties if Not Used for College One of the most common misconceptions is that unused 529 funds will result in high taxes and penalties. In reality, the penalty only applies to the earnings (not the contributions), and it is just 10%. Plus, the tax and penalty do not apply if the
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