529 College Savings Plan Turns 20: New Book By One Of Its Backers Reveals Cost-Cutting Strategies

BOSTON, Aug. 4, 2016 /PRNewswire/ -- "For most families, a 529 College Savings Plan is the best investment option for saving for higher education costs for their children," assert the authors of a new book, Plan and Finance Your Family's College Dreams (Peterson's).  Co-author Peter Mazareas, Ph.D. should know.  He helped Congress pass the landmark legislation 20 years ago this month and has helped design and launch many of the nations' largest and successful 529 Plans over the past 20 years.

"Many Congressional and tax experts view Section 529 as one of the most generous tax provisions ever passed by Congress for the benefit of American families," says Mazareas.  "These plans combine tax-free incentives with a host of unique features and benefits designed to encourage families at all income levels to save for college-related expenses."

Parents can use all of the help they can get. Total student loan debt now exceeds 1.3 trillion dollars. College tuition and fees rose 504% over the past 30 years, compared to 265% for medical care or 116% for the Consumer Price Index. 529 Savings Plans and prepaid programs have increased greatly, from $15 billion in 2001 to an estimated $275 billion today.

The authors' book identifies these top 10 reasons to utilize the 529 Plan:

1. Tax-deferred growth; interest, dividends, and capital gains accumulate free of federal taxes.
2. Tax free distributions when the proceeds are used for qualified higher education expenses at over 7,000 schools in the United States and abroad.
3. Special estate and gift tax treatment, with five-year accelerated gifting.
4. Continued ownership and control for account owners, including the ability to change beneficiaries to extended family members without penalty.
5. Professional financial management of investments by states, in partnership with leading financial services firms.
6. Very high maximum contribution and account balance limits.
7. No income limits restricting who can invest.
8. No age restrictions on beneficiary or contributor.
9. No required distributions in most programs.
10. Protection of savings from bankruptcy for account owner against creditors.

"529 Plans are treated favorably for financial aid purposes," says co-author John A. Hupalo.  "529 assets are treated just as savings accounts, mutual funds, or other financial assets are for purposes of financial aid calculations.  One myth that is occasionally promulgated by the media and some ill-informed financial advisors is that 529s – more so than other savings assets – will reduce the amount of financial aid you might otherwise qualify for.  This is simply not true."

Contact: Media Connect
Stephen Matteo 212-583-2776 [email protected]

SOURCE John Hupalo