529 Plans

Discover what's possible by saving for a lifetime of learning.

Many families today suffer from sticker shock when they learn what sending their children to college costs. While the cost of college can be a hard pill to swallow, it’s never too early to get familiar with a 529 college savings plan.

Here’s what you need to know:

  • Also known as a “qualified tuition program,” a 529 plan allows you to save for higher education expenses for a designated beneficiary.
  • Anyone—whether they’re a family member or friend—can establish a 529 plan for a beneficiary.
  • A 529 plan is provided by a state, an agency of the state, or by an educational institution itself.
  • Money invested in the plan accumulates on a tax-deferred basis. Distributions used for higher education expenses are tax and penalty-free as long as the funds are used for qualified education expenses. 

What are the benefits of a 529 college savings plan?

  • Tax advantages – tax-advantaged treatment applies to savings used for qualified education expenses.
  • Flexibility – you (the account owner), rather than the beneficiary, maintain oversight of account assets and determine the timing and amount of distributions.

Who can contribute to a 529 college savings plan?

Anyone can contribute to a 529 plan including parents, grandparents, beneficiaries, and extended family and friends.

What can 529 funds be used for?

Funds from a 529 plan must be used for qualified education expenses such as:

  • Tax advantages – tax-advantaged treatment applies to savings used for qualified education expenses.
  • Tuition and related fees incurred by a beneficiary attending an elementary or secondary public, private or religious school (K-12th grade); trade and vocational schools; community colleges; theological seminaries; international schools; study-abroad programs run through U.S.-eligible schools.
  • Room and board (on and off campus).*
  • Books and supplies such as textbooks, paper, pens and/or additional supplies.*
  • Computers and supplies including computer, laptop, printer, educational software and/or internet services.*
  • Student loans. Qualified expenses include amounts paid as principal or interest (up to a lifetime maximum of $10,000) on any qualified student loans of a designated beneficiary or the designated beneficiary’s sibling.

If you’re ready to start saving for education with a 529 college savings plan, contact Alex with Northumberland Financial Strategies to discuss savings and investment strategies and review the appropriate eligibility requirements.

Alex Hoppes   

Alex Hoppes
Investment Advisor Representative
570-701-3804
[email protected]

*excludes expenses related to K-12

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing. Investors should also 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. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.

Investments are: *Not FDIC/NCUSIF insured *May lose value *Not financial institution guaranteed *Not a deposit *Not insured by any federal government agency.

Northumberland Financial Strategies is a marketing name for Cetera Investment Services. Securities and insurance products are offered through Cetera Investment Services LLC, member FINRA/SIPC. Cetera is not affiliated with the financial institution where investment services are offered. 87 Lori Lane, Selinsgrove, PA 17870. 570-701-3804. For a comprehensive review of your personal situation, always consult with a tax or legal Advisor. Neither Cetera Investment Services, nor any of its representatives may give legal or tax advice.