Give the Gift That Will Last a Lifetime: A College Education
A 529 college savings plan can bring a smile to your grandchild’s face for years to come
The holidays are upon us again, and many grandparents are looking forward to one of their favorite moments of the season – the delighted smiles of grandkids opening a present they’ve been dreaming of all year. Give it a few weeks, though, and last year’s trendiest toy often becomes this year’s latest giveaway.
This season, consider a gift your grandkids won’t break, wear out or outgrow – the enduring gift of a college education.
A 529 college savings plan lets you give all your grandkids a brighter future, no matter their age and regardless of whether their parents have opened a savings plan of their own.
Why open or contribute to a 529 savings account instead of writing a check?
Unlike checks or cash, 529 college savings accounts provide a tax-advantaged way to help fund your grandkids’ higher education, while offering you some potential savings of your own: Contributions per grandchild up to $14,000 a year for single filers, or $28,000 for married couples, are free from federal gift taxes, and certain lump sums can be pro-rated over five years with the federal gift tax exclusion.1,2
And because the 529 account owner maintains control of the assets, you can choose how the money is invested, approve withdrawals and designate a new beneficiary should a grandchild earn a full scholarship (and give you bragging rights for years to come).3 You could even name yourself as the replacement beneficiary and continue your own education — taking all of the electives you didn’t have time for years ago. Golf stroke mechanics class, anyone?
Even if your grandchild defers college after high school, any money you place in the 529 account will continue to grow free from federal income taxes.
Talk to your financial advisor
To learn more about opening or contributing to a 529 college savings accounts for your grandkids, contact your financial advisor and visit CollegeBound529.com.
Remember: Contributing to a 529 college savings plan for your grandchildren today can help give them the future of their dreams – the one holiday gift they’ll never outgrow.
1 Source: irs.gov, instructions for Form 709, p. 5
2 If the contributor dies during the five-year period, a prorated amount will revert back to the contributor’s taxable estate.
3 For beneficiary changes to occur without federal or state income tax consequences, the new beneficiary must be a family member of the current beneficiary. Please see the Program Description for a definition of “Member of the Family.”
Director, Retirement and Education Strategies
Thomas Rowley is director of retirement and education strategies and one of Invesco’s most frequently requested speakers. He provides analysis of the evolving retirement landscape and develops actionable strategies to help investors and financial advisors maximize their retirement-planning opportunities. Mr. Rowley regularly shares his insights online at invesco.com/us in addition to his speaking engagements.
Mr. Rowley’s insights reflect more than 20 years of experience in the investment industry. He translates his comprehensive knowledge of retirement planning into lively, clear explanations of the complexities of legislative, investing, tax and social issues.
Mr. Rowley shares his analyses of retirement-related issues through regular personal appearances, continuing education webinars and Web-based commentaries.
Mr. Rowley has been director of retirement business strategy since 2010. Prior to joining Invesco in 2010, he was in charge of individual retirement plan products and Retirement Marketing at Van Kampen.
Prior to joining Van Kampen in 1996, he was a 401(k) regional sales director with an investment firm. His experience also includes seven years in retirement plan operations and three years as head of a brokerage firm’s retirement help desk. He began his career in the Treasury bond futures pit at the Chicago Board of Trade.
The information provided is for educational purposes only and does not constitute a recommendation of the suitability of any investment strategy for a particular investor. Invesco does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state tax laws are complex and constantly changing. Investors should always consult their own legal or tax professional for information concerning their individual situation. The opinions expressed are those of the authors, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
All data provided by Invesco unless otherwise noted.
Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail products and collective trust funds. Invesco Advisers, Inc. and other affiliated investment advisers mentioned provide investment advisory services and do not sell securities. Invesco Unit Investment Trusts are distributed by the sponsor, Invesco Capital Markets, Inc., and broker-dealers including Invesco Distributors, Inc. Each entity is an indirect, wholly owned subsidiary of Invesco Ltd. PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC, investment adviser. Invesco PowerShares Capital Management LLC (PowerShares) and Invesco Distributors, Inc., ETF distributor, are indirect, wholly owned subsidiaries of Invesco Ltd.
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Give the gift that will last a lifetime: A college education by Invesco