529 questions
529 questions
I was speaking with a financial advisor (nice guy but he charges 1% AUM!) during a tour/run at my son’s university (parent’s weekend). He planted in my head the idea of investing in my son’s 529 plan forever which could be a great way to pass down an educational fund to my grandkids. Plus, if I invest in it every year we get a tax deduction in New York State. I just wanted to be sure I was thinking about this correctly. If I invested $5,000/year even when my son is done with college and medical school and depleted the 529 fund (which we are close to doing already) I can keep investing in it, allowing it to grow over 25 + years and he can pass this down to his kids who can reap the educational benefits? Is this feasible even though he’ll be an adult and working himself as a physician in 10 years while I keep adding to his 529 fund? Thanks for your help!
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Re: 529 questions
Since OP has a personal and actionable investment question, this topic is now in the Personal Investments forum.
Re: 529 questions
Sure, you could do this, plus there is the new 529 to Roth IRA provision you could do.
https://www.forbes.com/sites/kellyphill ... 7940205563
https://www.forbes.com/sites/kellyphill ... 7940205563
- Brianmcg321
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Re: 529 questions
All you would really be doing is changing the beneficiary to another person. You are the owner of the 529 plan. Your son is just currently the beneficiary of it. You can change that at any time.
https://www.savingforcollege.com/articl ... %20website.
https://www.savingforcollege.com/articl ... %20website.
Rules to investing: |
1. Don't lose money. |
2. Don't forget rule number 1.
Re: 529 questions
Wouldn’t changing the beneficiary to a different generation cause a gift tax?
So, you could do the plan but you would be able to only transfer 17k per child per year without filing gift tax forms
So, you could do the plan but you would be able to only transfer 17k per child per year without filing gift tax forms
Re: 529 questions
One other thing… I forget who is supposed to file the gift tax form if you transfer over 17k per person per year to a lower generation. I know it used to be the beneficiary but that may have been changed to having the owner do it.
Re: 529 questions
Would I have to file a gift tax form if I did not exceed the 17k per year transfer amount? Do 529 accounts from different states vary on this limited transfer of 17k per year if changing beneficiaries?
Re: 529 questions
I don’t think that a gift tax form would be required if you stay under the 17k annual exclusion limit.
It may also be possible (others on the board may be able to say with more certainty) to superfund a transfer. I.e., yiou could transfer 85k in one year and treat it as 5 equal annual payments