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Create an Education Plan

Sallie Mae reports that, on average, American families cover 24% of college costs by borrowing. However, there are some people who borrow almost the full cost of college or they could not go at all. The truth is that many parents simply did not set enough money aside to pay for college for their kids. When you work with a Trapp Financial advisor, you learn about the 529 college savings plan and what it can do in an effort to ensure this doesn’t happen to your family. The team at Trapp Financial listens to your goals for education for you and your family. Then options will be reviewed with you based on your needs.

How a College Savings Plan Works

Virtually every state has a 529 plan and how it works depends on the rules in that state. Some states even offer amazing tax breaks for people who use college savings plans, even if the beneficiary they name is not their children. You can also opt into plans from other states, but most people start with their home state’s plan.

What the Benefits Are

When students make withdrawals for qualifying education purposes, the withdrawals are generally tax- free. Here are some common qualifying expenses:

  • Off-campus accommodation
  • Food and meal plans
  • School tuitions
  • Computers
  • Textbooks

How To Choose the Right Plan

Many people decide not to use the home state plan. Instead, they pick the plans they use based on tax benefits, account fees and portfolio performance. At Trapp Financial, we have the tools and experience you need to focus the plan you choose and customize for your needs.

Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

Trapp Financial and LPL Financial do not provide legal or tax advice. Please consult your legal or tax representative regarding your specific situation.