Saving for college and trying to estimate how much college is going to cost may seem like quite the hurdle at the rate tuition costs are rising. Setting up and contributing to a 529 plan is a great way to start saving toward funding this goal. Are you on track with your current savings? Did you know that you do not necessarily have to save alone and can receive help from family & friends? Many 529 plans have platforms in place where anyone can contribute to your children’s 529 plan. We are starting to see this feature be used much more in place or in combination with birthday presents, holiday gifts, or gifts for special events.
Every 529 plan is different but typically there is a service available that will create a link that can be shared with family & friends to directly gift to a specific child’s plan. This makes it very easy to include in an evite to a birthday party or special event. Not only will the contributions help save for college expenses but depending on the state there could be some tax benefits for the gift. In our home state of Pennsylvania, for every contribution made to a plan, a state tax deduction can be taken on the total amount contributed in a given tax year.
Although asking for help may seem uncomfortable, close family & friends may surprise you with how much they are willing to help in this unique way. For more information of gifting with 529 plans, please feel free to reach out to us with any questions you might have.