529 Plans…The Gift They REALLY Need

savingsIf you are a grandparent, finding just the right gift for your grandchildren can often be quite the dilemma (We would argue that even parents have a hard time with gift giving ideas as their kids get older). It is a difficult pull between the fun must-have gift that they REALLY (add childlike pitch here) want and something they need (aka – socks and underwear)…all the while trying to find something they won’t quickly outgrow. This year, we at Financial Fiduciaries would like to offer a bit of advice, and suggest a gift that will hold their attention for years to come.

As a grandparent, one of the most important things you can give your grandchildren is the opportunity for a bright and happy future. With that in mind, we would suggest that every grandparent should consider the gift of a 529 college savings plan. While your grandchild might not appreciate that they REALLY need this now, it is a great way to pave the way for their future.

The features of 529 plans can vary from state to state; however, there are several things that make them quite attractive for both grandparents and the grandchildren who ultimately receive their benefit. One of the biggest advantages is the fact that a withdrawal from a 529 plan is federal income tax-free when used for higher education costs such as tuition, books, fees, supplies and other qualifying expenses. Also, if a grandparent maintains control of the account, they have the ability to determine when the proceeds can be dispersed (note: you can also contribute to an account controlled by the child’s parents). Additionally, many grandparents like the fact that they will not incur a gift tax on annual gifts up to $14,000 (or a total of $60,000 per grandparent, per beneficiary). And, because 529 plans can be “front-loaded” they allow more time for tax-deferred savings growth.

There are many things to consider if you are thinking about starting a 529 savings plan for your grandchild. One of the best places to start your research is to discuss your plans with a fee-only certified financial planner. They can educate you on the best college savings tool for your needs and talk about the implications and regulations associated with each.

As the holidays approach, a 529 plan just might be the perfect solution to your gift giving dilemmas.  And, even if your grand kids don’t see the benefit of such a gift right now, we can guarantee that someday they will be very thankful you cared enough to give them something they REALLY need!

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s