At Plan 4, we have one mission: to assist you in achieving your financial goals. Our experienced team of advisors believes that an educated client is an empowered client. We are committed to honest and forthcoming dialogue and evaluation. We tell it like it is and enable you to take control of your financial future. Paying for college for yourself, your children, or for another family member or friend is a tremendous investment. Developing a solid plan to pay for college is an important part of taking charge of your financial fitness. Meet with one of our trusted advisors today to discuss your options.

• Help your child identify their interests, skills, and passions, and  clearly define the limits of your financial commitment.  This will enable you to develop a comprehensive plan for how your student can pursue their dreams and determine which college or institution is the best fit educationally and financially.
• It is best to be proactive in your approach to college planning so that your student will have the choice of where to best pursue their education while avoiding exorbitant debt.
• A proactive financial approach to funding education is important for the family to determine what they need to work toward saving, as well as what other funding options they should pursue.

Early college preparation is important, but it is never too late to start the process. Orderly college planning will allow students more information about colleges, enable their choices to be more relevant to their personal lives, and ensure that they can enjoy the college planning process rather than stress about deadlines and finances.

A 529 College Savings Plan is a tax advantaged investment account that can be used to cover higher education expenses as well as private elementary and high school costs. 529 Plans are usually sponsored by individual states. Over thirty states have 529 College Savings Plans. The name 529 Plan stems from Section 529 of the Internal Revenue Code, which specifies the plan’s tax advantages. These types of plans are beneficial because earnings grow federally tax-deferred, while qualified withdrawals can be made tax-free. Many states have their own set of tax benefits as well. New York's 529 College Savings Program has the Direct Plan with its own benefits as follows: pay no income tax on earnings, make tax-free qualified withdrawals, receive state income tax deductions, and enjoy a federal gift tax incentive.

One reason to start a college savings plan is to take advantage of tax savings. When you set up a 529 Plan, it’s important to choose one that allows you to get the maximum tax credits for your state. When you combine saving for your child’s college education with saving money on your state income tax return, it's a win-win for everyone. 

College savings plans are not all created equal. When we set up your 529 Plan, we carefully consider the different investment options and their timelines. The best plan for you will depend on how many years the student has until they’re going to use the money. The investment strategy will not be the same for a newborn as for your child who just started high school, because timing is a factor that needs to be considered.

Before you set up a 529 Plan, you must understand how you can use the money it earns:

• 529 Plans grow tax deferred
• Any money you withdraw will not be taxed
• You can use the funds to pay for tuition, fees, and books
• You can only pay for room and board if the student doesn’t live at home

If you withdraw money from the 529 Plan for non-qualified expenses, you will pay a 10% penalty on any earnings. You must also pay taxes on the earnings, but not your original contributions.

ABLE (short for Achieving a Better Life Experience) accounts function under the same tax rules as 529 College Savings Plans. They’re administered by the state, but ABLE plans are specifically for individuals diagnosed with significant disabilities before the age of 26. The money you contribute to an ABLE plan isn’t tax deductible. However, earnings aren’t taxed, and any distributions made for plan-approved purposes are also tax-free.

The biggest benefit of ABLE accounts is that the first $100,000 in the account is not treated as a personal asset of the beneficiary. This is important because disabled individuals can be barred from receiving financial assistance if they have significant assets. Your contributions to the ABLE account may even qualify for other tax credits, such as the Saver’s Credit.

You can use the funds in the ABLE account to pay for education, but qualified disability expenses also include medical treatment, tutoring, special-needs transportation, assistive technology, housing, and legal and administrative fees. An ABLE account allows parents to plan for the needs of their disabled children without limiting access to government assistance.

Taking steps early on to prepare a solid college funding strategy seeks to ensure that you are ready when the time comes. This means more than just saving money; taking advantage of tax-free growth and exploring all available options seeks to ensure that you make the most out of your college savings. Schedule a meeting with one of our advisors today. Whether you are the student or are helping to pay for another’s education, Plan 4, Inc.’s experienced team of advisors are here to help you pursue your financial goals.

How do I set up a 529 Plan in New York?

NY’s 529 College Savings Program has the Direct Plan with its own benefits as follows: pay no income tax on earnings, make tax-free qualified withdrawals, receive state income tax deductions, and enjoy a federal gift tax incentive. Meet with one of our advisors to discuss options to set up your New York 529 College Savings Plan today! We can find what works for you and make sure that your contributions are in line with your goals.

How do I set up a 529 Plan in Massachusetts?

Meet with one of our advisors to discuss options to set up your Massachusetts 529 College Savings Plan today! We can find what works for you and make sure that your contributions are in line with your goals.

What If My Child Doesn’t Use All the Money in the 529 Plan over the Course of Their Education?

If your child doesn’t go to college or doesn’t use up all the funds, you can change the beneficiary of the account. The new beneficiary has to be another family member. For example, it can be a sibling, first cousin, aunt, or uncle of the original beneficiary. You can also decide to leave your contributions in the account and allow it to grow for the beneficiary’s children. Finally, you can always withdraw the assets in the account for non-qualified expenses, but you will have to pay taxes on any earnings in addition to a 10% penalty.

Who Can Open a 529 College Savings Plan?

Anyone can open a 529 account. It’s often the parents, grandparents, or other family members who contribute money to a child’s education fund. You can name the same child as a beneficiary in more than one 529 plan. You can even open a 529 Plan for yourself. The beneficiary must be a U.S. citizen or resident with a social security number or federal tax identification number.

What Are My Investment Options for a 529 Plan?

Your investment options for a college savings plan vary by state. You can control the allocation strategy in terms of risk. Most people use the age of the child to determine the best investment mix, leaning toward conservative investments as the beneficiary ages. You can change your investment options twice per calendar year, and you can even move the funds to a different state’s 529 plan if needed. Call us to find out what type of savings plan is available for you.