With the cost of college continuing to rise, more and more parents are locking in today’s prices for the future. Many are investing in 529 college plans for their children’s education. A 529 plan is a tax-advantaged investment plan in the United States that was created to encourage saving for the future higher education costs of a selected recipient.
However, a 529 plan might not be the right choice for everybody. Experts say there are two main things to consider prior to investing in a 529 plan. First, it is important to determine if you live in a state with a tax benefit, such as funds matched by the state or tax-deductible contributions, for those who invest in a 529 plan that originates in that particular state.
Only a few states permit benefactors to apply that state’s tax benefit to any 529 plan, known as tax parity, despite whether the benefactor resides in that state. Those states include Missouri, Arizona, Maine, Kansas, and Pennsylvania.
The second thing to consider is how much money you plan on investing. Even though 529 plan fees are decreasing, anything under $2,000, which is considered a low threshold, may be an indicator that you should invest your money elsewhere.
So if a 529 plan isn’t the right choice for you, what other options are there when it comes to paying for a loved one’s college tuition? There is always financial aid and scholarships, but not everyone qualifies for this assistance and even then, the entire cost of college is not always covered. However, if you are receiving annuity payments, Peachtree Financial Solutions may be able to help.
Did you know that you can sell your annuity payments to Peachtree Financial Solutions for cash now? Instead of receiving your annuity payments over the next several years, you can receive all of your money upfront when you sell your annuity payment stream. This financial freedom opens up doors to things that may not have been possible before, and can give you the money you need to pay for a college education in its entirety. Contact Peachtree Financial Solutions today to learn more about how you can sell your annuity payments for a lump sum of cash now.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.