Happy 529 College Savings Day

May 29th is 529 College Savings Day, a unified push by many states to increase awareness of the tax-advantaged college savings plans known as 529s, and boost interest and participation in their respective programs with various sweepstakes, contests and incentives.

But why have a day dedicated to saving for college?  Well, with $1.2 trillion1 of outstanding student loan debt in this country, it is never too early to start a disciplined savings plan.  And remember, you should engage your children in any plan you establish.  Depending on their age, this may include earmarking a portion of their allowance to go towards their college savings plan, or incentivizing them to get good grades in school by offering bonuses to their plan.  Remember, you are not the one going to college, so why should you be the only one making contributions to the plan.

What was the plan I had with my parents?  We would split the cost of my college education 50/50, as long as my grades were good.  Any scholarships I received applied towards my share.  Any course where my final grade was below a C, I had to pay the entire cost of the course.  This provided me with an incentive to study, as well as work every summer in support of my education.

You see, the idea of a state-sponsored plan to help families with college expenses was just getting started when I was graduating from high school.  Now every state has at least one plan available, possibly more, and some states offer income tax benefits for participation.  To find out about the college savings promotions taking place in and around the month of May, check out this link from Savingforcollege.com.  And don’t limit your thoughts about college savings to just one day a year.

Prior to investing in a 529 Plan, investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program.  Withdrawals used for qualified expenses are federally tax-free.  Tax treatment at the state level may vary.  Please consult with your tax advisor before investing.  Savingforcollege.com is a separate, non-affiliated entity.

About Connections Financial Advisors

Connections Financial Advisors is a comprehensive wealth management firm utilizing an ensemble practice methodology to provide its clients with the highest level of service.  The firm offers a broad array of financial services, including retirement planning, tax management, estate planning, risk management, education funding, investment management, employee and executive benefits.

The Economist, August 15, 2015

Securities offered through LPL Financial, Member FINRA/SIPC.  Investment advice offered through Level Four Advisory Services, LLC, a registered investment adviser.  Connections Financial Advisors and Level Four Wealth Management are separate entities from LPL Financial.

Recent Posts

The Biggest Life Insurance Mistakes and How to Avoid Them

By Joe Globensky, RFC® September is Life Insurance Awareness Month.  And while we don’t limit our life insurance conversations to just this month, we want to share some of the biggest life insurance mistakes that we see and help you avoid them.Life...

How Do Insurance and Financial Planning Work Together?

By K. Bridget Schneider, CFP®, CRPC®Risk management is at the heart of any financial plan.  Being prepared for the unexpected can help you stay on track to reach your financial planning goals if you incur a loss or are injured in an accident, become sick,...

The Pros and Cons of Deferred Compensation

By Joe Globensky, RFC®At some point in your career, you may be offered participation in a nonqualified deferred compensation (NQDC) plan. Currently more than 90% of public companies offer some sort of NQDC plan and nearly half (44%) of eligible employees...

Financial Fraud and How To Prevent It

By K. Bridget Schneider, CFP®, CRPC®If you think you're immune to financial fraud, think again.  Financial fraud is an ever-present threat to all ages.  It comes in many forms from an attempt to access your money and financial accounts with your personal...

What is Indexed Universal Life Insurance?

By Joe Globensky, RFC® As part of our initiative to educate our clients and prospective clients, we often check out what is trending on social media.  What products or solutions are people searching for?  What industry terms do people want to know more...


Office: 217.605.8130
Toll-Free: 844.305.7670
Fax: 217.666.4188

604 N Union St Ste 1
Lincoln, IL 62656

Email Us


Sign up to receive the latest news, tips, outlooks and more: