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    Every parent wants their child to have a great education. The question is often how to pay for it. That’s why many families are finding the flexibility they need in a 529 educational plan. This can be a compelling option not only for college expenses but for educational costs before college as well.

    Money invested in a 529 plan is designed to grow free from federal taxes, provided the funds are used for qualified educational expenses. As of 2018, 529 plans are no longer restricted to higher education, and funds of up to $10,000 per year can be used for qualified education expenses at private K-12 schools.
     
    If you are considering a 529 plan, here are some tips that can help you make the most of it.
     
    Comparison Shop.
    529 plans are managed by the state. Every state manages at least one, and each plan has different rules. You can invest in a 529 from any state — not just your own. More than 30 states, including Alabama, provide tax breaks for 529 contributions. When evaluating a plan, consider its investment menu, contribution limits and other rules. A side-by-side comparison of 529 plans is available at www.SavingforCollege.com.
     
    Understand Gifting Rules.
    Contributions to a 529 plan are treated as gifts under federal rules, meaning there is a cap on how much you can give tax-free. This cap is subject to change, so it is best to check with the IRS to see what the current year’s gift-tax cap is. You could consider opening a 529 plan when a child is young, and then make annual contributions up to the federal annual gift-tax exclusion each year. This also gives the money more time to grow.
     
    Know Transfer Rules.
    Another perk to 529s is flexibility. If your original beneficiary doesn’t use all the savings, you can transfer the savings to another member of your family and keep the tax-free growth and withdrawal benefits.

    If you are interested in learning more, a Regions Wealth Advisor can help you decide on the right plan as well as a monthly contribution that will fit your budget. A Regions advisor understands your needs, as well as your plans for your child’s education.
     
    MEET THE EXPERT
    Henry Moore is a Wealth Advisor for Regions Private Wealth Management. You can contact him at henry.moore@regions.com.
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