Is a 529 plan a bad idea?

There’s nothing inherently wrong with 529 plans as long as you use them for qualifying educational expenses. But there are other means to save for college. A few other options besides the Roth IRA mentioned above are CDs, brokerage accounts, and alternative savings accounts.

Is a CHET account a 529 plan?

The Connecticut Higher Education Trust (CHET) is a state-sponsored, tax-advantaged 529 college savings plan that’s helping families and individuals plan for the cost of higher education.

Why you shouldn’t invest in a 529 plan?

It could hurt your child’s chances of getting financial aid Any distributions from a 529 plan that’s owned by a third-party are counted as untaxed income, and they may hurt your child’s chances of qualifying for financial aid, including grants, work-study programs, and subsidized loans.

How much can I contribute to a CT 529 plan?

$5,000 per year
Contributions to a Connecticut 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing Connecticut taxable income, with a five-year carryforward of excess contributions. Rollover contributions are not deductible.

Why is Chet moving to Fidelity?

In February, all CHET accounts automatically moved from the previous program manager, TIAA, to Fidelity Investments. Fidelity was selected to be the new program manager for CHET because of the experience we can provide to help Connecticut families reach their education savings goals.

How do I write off 529 contributions?

Earnings from 529 plans are not subject to federal tax and generally not subject to state tax when used for qualified education expenses such as tuition, fees, books, as well as room and board. The contributions made to the 529 plan, however, are not deductible.

Can a 529 plan lose money?

False. You don’t lose unused money in a 529 plan. The money can still be used for post-secondary education, for another beneficiary who is a qualified family member such as younger siblings, nieces, nephews, or grandchildren, or even for yourself.

What should we do with the 529 plan?

529s Aren’t Just for Four-Year Colleges. You can use money in a 529 at any institution of higher education that receives financial aid.

Which 529 plan is best for You?

as well as other investment

What are some benefits of a 529 plan?

529 plans offer several benefits, including: Federal tax breaks. You won’t pay taxes on 529 plan earnings, provided you use the money for qualified higher education expenses, vocational school, K-12 tuition or apprenticeship fees or expenses. State tax breaks. Age-based options. No Income-based restrictions. Prepaid tuition. Flexibility of use. A range of choices. The ability to change investments.

What are the 529 plan rules?

According to the IRS, 529 plan rules state that the money you withdraw must be used for qualified higher education expenses. These expenses include tuition, fees, books, and room and board (if the student is attending school at least half-time) for college and graduate school.