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Dec 10, 2021

How to Set Up a 529 Plan for Your Kids

how to set up a 529 plan

Paying for higher education is a serious financial undertaking for many families. Starting a college fund early and saving regularly can help you gain leverage and offset some of the worries. If college savings is one of your financial goals, then choosing to invest in a 529 savings plan may be one of the most thoughtful decisions you can make.  A 529 Plan helps you take advantage of tax benefits when your child is very young and can help you save money on your child’s education. Read on to learn facts and tips from our trust attorney on how to set up a 529 plan today!

List of Contents

How To Set Up a 529 Plan

Step 1: Select a 529 Plan

Every state offers a 529 plan, and you can also open multiple 529 plans across numerous states. However, each state’s 529 plan has its own set of benefits, and in some cases, these are limited to residents. For example, a state income tax credit may only be available to residents of a state offering the plan. There are other considerations as well, such as fees and minimum contributions.

If you want to know how to open a 529 plan, the College Savings Plan Network (CSPN) offers comparisons across states. It also has a map that makes it easy to find the state plan. If you are unsure which provider or plan is best for you, consider seeking advice from a financial advisor. 

Step 2: Open the 529 Account

You can likely open an account online, and you can start contributing right away. To open the account, you will need to provide your personal information and the information of the beneficiary(ies).

Step 3: Start to Build Your Portfolio

You can decide where to invest your money and how aggressive or moderate you want to be. Your amount of reserve might depend on how long the account will stay open.

Keep in Mind

Although each institution may treat the assets held in account 529 differently, investing in a 529 plan usually affects students’ eligibility for university financial aid. Although the 529 plan has benefits, it does not always allocate sufficient funds for the child’s education. In some cases, applying for student loans is also necessary.

We Can Help With a 529

This guide to opening a 529 plan should have simplified the process of setting up a college fund. If you’d like to learn more about how to start a 529 College Endowment Plan for your child, or if you want to make sure you’re not saving for college the wrong way, contact us today.

There’s never been a better time than now to start planning for your child’s future. An experienced trust attorney can help you with this critical process. At Lewman Law, we understand that planning to help your loved ones can be difficult, but it’s essential if you want them to have the resources they need to be successful in life. For more information on how we can help ensure your children have what they need for college finances, contact us today by calling (925) 447-1250 or fill out an inquiry here.

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