With the holidays just around the corner, you're probably preparing gift lists and starting to shop for the special people in your life. But it's not always easy to find that perfect present for a grandchild, nephew, niece, or younger family friend. This year, consider giving the gift of college by opening or contributing to a 529 college savings plan account on behalf of a child.
A better way to give
Unlike ordinary gift checks or cash, a 529 plan contribution is an investment in a child's future that has the potential to grow and help offset the rising costs of college. Starting an annual giving tradition now can pay bigger dividends later by making a quality education more accessible for a young family member or friend.
Opening a 529 account on behalf of a loved one
Anyone can open a 529 plan account for a child, including grandparents, other family members, or friends. This may be a good choice for older investors who may already have enough money to ensure a comfortable retirement income and wish to transition wealth to their heirs while reducing estate tax exposure.
In addition to having the satisfaction of helping fund a child's college education, 529 account owners can:
- Maintain control over the account and asset allocation.
- Enjoy significant tax advantages.*
- Benefit from professional investment management.
Invite family and friends to contribute through Ugift®
If your child already has a 529 plan account in his or her name and you don't see the need to open another, Ugift might be a better choice for family and friends. Ugift is an automated, online program that lets you send invitations (electronically or on paper) requesting gift contributions to your child's 529 plan account.
Note: Tax savings from 529 plan contributions can only be claimed by the account owner.