Pittsburgh, PA - Fragasso Financial Advisors, a trusted name in financial planning and investment management, is raising awareness about the significant benefits of 529 plans as a powerful tool for families looking to manage education costs effectively. As outlined in their recent blog post, 529 plans offer flexible, tax-advantaged savings opportunities that can provide both immediate and long-term financial benefits.
529 plans are specialized investment accounts designed to help families save for future education expenses. While they are commonly associated with funding college tuition, Fragasso Financial Advisors highlights that 529 plans also provide tax advantages that can benefit account holders today.1
Immediate Tax Benefits for Families
One of the key advantages of 529 plans is the opportunity for state income tax deductions. Many states, including Pennsylvania, allow residents to deduct contributions to a 529 plan from their taxable income. This can provide families with substantial tax savings in the current year while building a dedicated fund for future educational expenses.
Additionally, earnings within the 529 plan grow tax-free, and withdrawals are also tax-free when used for qualified educational expenses. These expenses can include tuition, books, supplies, and even certain housing costs for college students.
Flexibility in Educational Planning
While 529 plans are often viewed as college savings tools, Fragasso Financial Advisors underscores their versatility. Recent changes in tax laws have expanded the eligible uses of 529 plan funds. Families can now use 529 funds for K-12 private school tuition and qualified apprenticeship programs. Up to $10,000 can also be applied toward student loan repayment for both the account beneficiary and their siblings.
Maximizing the Benefits of a 529 Plan
Fragasso Financial Advisors emphasizes that timing and contribution strategy are essential to maximizing a 529 plan's potential. Families are encouraged to start saving early to take full advantage of compound growth. Even modest contributions can add up significantly over time.
Grandparents and other family members can also contribute to a child’s 529 plan, providing a meaningful way to invest in their future. Contributions can be treated as gifts for tax purposes, with special provisions allowing up to five years’ worth of annual gift tax exclusions to be contributed in a single year.
Why Families Should Take Early Action
With rising education costs, Fragasso Financial Advisors encourages families to evaluate their savings strategies sooner rather than later. By investing in a 529 plan today, families can reduce their reliance on student loans and ease the financial burden of higher education.
Fragasso Financial Advisors’ experienced team is available to help families understand how 529 plans can align with their broader financial goals.
For more information about 529 plans, read the full blog post here: https://www.fragassoadvisors.com/529-plans-benefit-today-while-preparing-for-tomorrow/.
1 https://www.irs.gov/newsroom/529-plans-questions-and-answers
Investment advice offered by investment advisor representatives through Fragasso Financial Advisors, a registered investment advisor.
About Fragasso Financial Advisors, Inc.
Fragasso Financial Advisors, Inc. operates as an independent, primarily fee-based, employee-owned financial advisory establishment. Since its inception in 1972, the firm has been providing personalized financial planning and investment management services to individuals, non-profit organizations, and businesses. With a focus on long-term relationships and a commitment to providing an exceptional client experience, Fragasso Financial Advisors is a fiduciary, acting in their clients’ best interests with every decision.
Media Contact
Name
Fragasso Financial Advisors
Contact name
Marsha Posset
Contact phone
412-227-3206
Contact address
3402 Washington Road, Suite 301
City
McMurray
State
PA
Zip
15317
Country
United States
Url
https://www.fragassoadvisors.com/