Seacoast Investment Services

Reinventing Retirement Through a 529 Plan

During these uncertain times, 529 plans may make more sense than ever.

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For many people, a 529 savings plan offers an opportunity to achieve an important life goal and improve overall financial health. As college and university administrators determine how higher education will look in the future (classes on campus, remote learning or a mix of both), the benefits of a 529 plan have never been more meaningful.

Here are three benefits that are particularly important during these times — especially as the cost of higher learning continues to rise.

1. Not only can 529 plan assets be used to pay for tuition and books, they can also pay for computers, internet access and other equipment. This will be especially important if remote learning continues indefinitely.

2. The recently passed Setting Every Community Up for Retirement Enhancement (SECURE) Act expanded qualified expenses to include registered apprenticeship programs2 and repayment of college debt.

3. Account owners have full control over 529 plan assets and can even be the beneficiary of their own account. This is a huge benefit for anyone looking to go back to school right now to advance their skills for the evolving work environment and new opportunities that may come with it.

Study Guide: A 529 Plan

A 529 plan is a tax-advantaged savings plan designed to help pay for education. Originally limited to postsecondary education costs, it was expanded to cover K-12 education in 2017. The two major types of 529 plans are savings plans and prepaid tuition plans. Savings plans grow taxdeferred and withdrawals are federally tax-free if they’re used for qualified education expenses. Prepaid tuition plans allow the account owner to pay in advance for tuition at designated colleges and universities, locking in the cost at today’s rates.

Follow the Money

Distributions from a 529 plan can be used to cover a long list of qualified education expenses at qualified institutions. Here’s a summary:

Qualified Expenses

K-12

  • Tuition up to $10,000 per year per student

Postsecondary

  • Tuition and fees
  • Books, supplies and equipment required for enrollment or attendance
  • Room and board (on- or off-campus for students who are at least half time)
  • Computer peripheral equipment, software and internet access if used primarily by the beneficiary
  • Special needs services as required by beneficiaries in connection with enrollment or attendance
  • Fees, books, supplies and equipment required for participation in a registered apprenticeship program

Types of Eligible Institutions

  • In-state or out-of-state colleges
  • Public and private schools
  • Vocational schools
  • Technical and trade schools
  • International higher education institutions
  • Any public, private or religious elementary or secondary school
  • Registered apprenticeship programs2
  • Repayment of principal/interest on any qualified education loan up to a $10,000 lifetime limit for the designated beneficiary

 

Have questions on how to start your 529 plan? Contact an advisor with Seacoast Investment Services today.

2Registered and certified with the U.S. Department of Labor.


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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products offered through LPL or its licensed affiliates. Seacoast Bank and Seacoast Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Seacoast Investment Services, and may also be employees of Seacoast Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from,and not affiliates of Seacoast Bank or Seacoast Investment Services. Securities and insurance offered through LPL or its affiliates are:

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