Time to read: 2 minutes
As the father of three college graduates, I know firsthand how exciting it is when students return home from school for Thanksgiving break — and not just for the parents. For many students, Thanksgiving break is their first trip back home since the school year started, making that long-awaited family reunion especially sweet.
In the spirit of Thanksgiving, here are four things your college student may be grateful for at this time of year:
- The smell of home. You may not realize it, but your home has a distinct smell — a unique scent that evokes instant nostalgia and comfort for anyone who’s been away for a while. As your student walks in the door for the first time, they’ll likely take a deep breath, followed by a big smile. It’s good to be home!
- Home-cooked meals. Cafeteria food has come a long way since I was in school, but it’s still no substitute for a lovingly made meal shared with friends and family — especially when pumpkin pie is involved.
- Time with friends and family. For my kids, Thanksgiving Break was always a whirlwind few days full of get-togethers with family and friends they hadn’t seen in months. College is a wonderful time to make a new group of close friends, but there’s nothing like reuniting with the people you know best.
- The gift of an education. We all hear that money doesn’t grow on trees, but most children don’t truly learn that lesson until they’re out on their own for the first time. Everything costs money: textbooks, housing, meals, a cup of coffee for those late-night study sessions. College can be very expensive, and many students may realize for the first time how lucky they are to be able to get a quality education.
However, those big expenses needn’t hit students and their families all at once. With a 529 college savings plan, a student’s family, friends and loved ones can begin contributing to their college savings fund long before they head off to college — and those savings can be applied to many of the everyday college expenses that add up so quickly.
What kind of expenses can a 529 plan cover?
A 529 college savings plan can pay for a wide range of qualified expenses associated with a college education, including:
- Tuition and fees
- Computers and equipment
- School supplies
- Room and board, including off-campus housing (for minimum half-time students)1
What’s more, a 529 plan lets parents begin saving for these costs well in advance — the funds they contribute will grow tax-free until their child is ready to use them at an eligible university or vocational school.
And, in some states, 529s are no longer just for college. Under last year’s tax reform law, 529s can be used in certain states to pay up to $10,000 per beneficiary per year for K-12 tuition costs.
There are many things to be thankful for this time of year, including the ability to help your children enjoy the lifelong benefits of a college education. To learn more about saving for college with a 529 plan, talk to your financial advisor or visit CollegeBound529.com.
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1 Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements and certain withdrawals are subject to federal, state, and local taxes.
Before you invest, consider whether your or the 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 that state’s qualified tuition program.
For more information about CollegeBound 529, contact your financial advisor, call 877-615-4116, or visit www.collegebound529.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Invesco Distributors, Inc. is the distributor of CollegeBound 529.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial advisor/financial consultant before making any investment decisions. 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.
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.