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Robert A. Imparato, Jr CFP®
CERTIFIED FINANCIAL PLANNER™ professional
Craig A. Hyldahl CFP®
CERTIFIED FINANCIAL PLANNER™ professional
R.I.C.H. Planning Group, LLC
105 Fieldcrest Avenue, Suite #507
Edison, NJ 08837
Robert: 732-326-5240
Craig: 732-326-5240
Fax: 732-326-5331
Robert: robert@richplanninggroup.com
Craig: craig@richplanninggroup.com
Website: www.richplanninggroup.com
May/June 2020
Saving for College
Coverdell Education Savings Accounts (ESAs)* and 529 plans** can be key to helping lower the cost barrier to college for many students.
Coverdell ESA
If you qualify by income limits, you can contribute up to $2,000 annually to the Coverdell ESA for qualified education expenses for college, elementary and secondary schools. Contributions are not tax-deductible.The ESA’s beneficiary must be under the age of 18 or a special-needs student to qualify, and all money must be distributed when the beneficiary reaches age 30, unless the student has special needs. You can keep the money, however, by changing the beneficiary to another student under 30. Potential earnings are tax-deferred and distributions are income tax-free up to the amount of qualified education expenses incurred. You can’t make contributions, though, for beneficiaries once they reach 18.
529 Plan
If you’re looking to put more money away, check out a 529 plan. This plan lets you prepay for a specific institution or contribute to an account that pays for a student’s qualified education expenses at any postsecondary institution. States establish their own 529 savings plans, each with their own contribution limits (which can be high), while eligible educational institutions can establish prepaid plans.Potential earnings in a 529 plan grow tax-deferred and qualified distributions are tax-free. While contributions aren’t federally tax-deductible, some states may allow a deduction, and there are no income restrictions.
Anyone can contribute up to $15,000 per individual and $30,000 per married couple filing jointly per year to a 529 plan, free of federal gift tax. You can also bunch contributions into one year up to the maximum of $75,000, but then you can’t contribute anything else in the subsequent four years.
* https://www.irs.gov/pub/irs-pdf/p970.pdf
**Certain requirements may apply. Before investing, consider the investment objectives, risks, charges and expenses associated with 529 plans. Read the program offering statement before investing. 529 plans are not guaranteed by any state or federal agency. Consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 plan. Discuss 529 tax rules with your tax professional.
GE-2823645a(11/19) (Exp. 11/21)
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Securities offered through Equitable Advisors, LLC (NY,NY (212) 314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN). Investment advisory products and services offered through Equitable Advisors, LLC, an SEC-registered investment advisor. Annuity and insurance products offered through Equitable Network, LLC, which conducts business in California as Equitable Network Insurance Agency of California, LLC; in Utah as Equitable Network Insurance Agency of Utah, LLC; and in PR as Equitable Network of Puerto Rico, Inc. Equitable Advisors and Equitable Network are affiliated companies and do not provide tax or legal advice.
R.I.C.H. Planning Group, LLC is not owned or operated by Equitable Advisors or Equitable Network. Equitable Advisors and Equitable Network are brand names for Equitable Advisors, LLC and Equitable Network, LLC, respectively.
GE-4833845.1 (7/22)(Exp. 7/24)
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