Author Topic: 529 plan .. for older son?  (Read 818 times)

albireo13

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529 plan .. for older son?
« on: April 02, 2018, 06:02:56 AM »
My oldest son is 26yo now.  He has an associates degree and is talking of going back to college for a BS degree. 
We would liek to help him out with college costs and was wondering if we can still utilize a 529 plan for him?
Is he too old?  Is there an age limit for the beneficiary of a 529?

I took a quick Google look but didn't find an answer.

Thx.

sokoloff

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Re: 529 plan .. for older son?
« Reply #1 on: April 02, 2018, 06:23:13 AM »
The chief benefit of a 529 is that gains in the account are tax-exempt when used for qualified expenses. If he's going to be going to college immediately, there's no time for gains to build up, leaving only potential state tax advantages, which are worth picking up provided there is no waiting period for recapture.

Google "529 plan adults" for several more good links.

seattlecyclone

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Re: 529 plan .. for older son?
« Reply #2 on: April 02, 2018, 12:18:24 PM »
Right, look into whether your state gives tax benefits to putting money in a 529 even when it is withdrawn for educational expenses that same year. There's no real federal tax benefit from doing this.

Snowman99

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Re: 529 plan .. for older son?
« Reply #3 on: April 02, 2018, 12:24:19 PM »
There is no age limit on the 529 plan, but the utility of the plan diminishes significantly with time because there is less time for the money to grow.

If your child will be attending school in the next year or so, there is little benefit to the plan, as there will not be much growth/tax savings.

You will get a small benefit from the state income tax deduction (if your state has one), but this is often very minimal.  We only save about $100.00/year in state income tax using the 529.


albireo13

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Re: 529 plan .. for older son?
« Reply #4 on: April 03, 2018, 04:36:12 AM »
Thanks.
  Yes he will likely start in a year and take maybe 3 years to complete the BS. 
I guess I'll just start saving money the old fashioned way.

: )