- Does having a 529 hurt financial aid?
- Do I need receipts for 529 expenses?
- Can I use my child’s 529 for myself?
- Why 529 is a bad idea?
- What happens to 529 if child does not go to college?
- What is better than a 529 plan?
- How much should you have in 529 by age?
- Can you lose money in a 529 plan?
- What are the advantages and disadvantages of 529 plans?
Does having a 529 hurt financial aid?
The 529 plans owned by college students or their parents count as assets and reduce need-based aid by a maximum of 5.64 percent of the asset’s value.
However, withdrawals from a 529 plan held by the non-custodial parent will be assessed as income against financial aid, just like those held by grandparents..
Do I need receipts for 529 expenses?
You don’t need to provide the 529 plan with evidence that you will be using the money for eligible expenses, but you do need to keep the receipts, canceled checks and other paperwork in your tax records (see When to Toss Tax Records for more information), in case the IRS later asks for evidence that the money was used …
Can I use my child’s 529 for myself?
Regardless of your age, you can set up a Section 529 plan for yourself to fund educational expenses now or in the future. … You can apply the funds for tuition, books, fees and even a computer, as long as it is used to further your studies.
Why 529 is a bad idea?
A 529 plan could mean less financial aid. The largest drawback to a 529 plan is that colleges consider it when deciding on financial aid. This means your child could receive less financial aid than you might otherwise need.
What happens to 529 if child does not go to college?
Expanded 529 plan qualified expenses give families more flexibility when a child doesn’t go to college. … If the money is used for anything outside of the qualified education expenses, the family must pay a tax penalty of 10% on the plan’s earnings.
What is better than a 529 plan?
A 529 savings plan is one of the best ways to save for a child’s college education, but there are alternatives. … Custodial UGMA and UTMA accounts can be used for purposes other than education. Roth IRAs have tax advantages similar to 529 plans and they don’t count as assets for financial aid purposes.
How much should you have in 529 by age?
I expect to get 6% per year return on my investments in my 529 plan….How Much You Should Have In Your 529 At Different Ages.AgeLow EndHigh End1$1,189$7,8162$2,451$16,1443$3,791$24,9234$5,213$34,27614 more rows•Dec 9, 2020
Can you lose money in a 529 plan?
True or false: I will lose the money if my child doesn’t go to college or gets a scholarship and doesn’t need all the money. False. You don’t lose unused money in a 529 plan. … You can withdraw the amount of any scholarship awards from your 529 without penalty; federal and state income taxes on the earnings still apply.
What are the advantages and disadvantages of 529 plans?
What Are the Pros and Cons of Using a 529 Plan?Advantages of Using a 529 PlanDisadvantages of Using a 529 PlanTax benefitsFunds must be used for educationLow maintenanceLimitations on state tax benefitsHigh contribution limitsNo self-directed investmentsFlexibilityFees1 more row•Jan 23, 2020