S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
Looking for the perfect holiday gift for a child or young adult? Here’s an idea: Give them a great education. Parents and family members are already educators. One way older generations help educate younger generations is by sharing wisdom and offering guidance and emotional support. Another way to provide education is by funding a 529 Education Savings Plans to help with the expense of K-12 school tuition, college expenses and some types of apprenticeship costs, reported savingforcollege.com.
529 Education Savings Plans have been an attractive way to fund education for a long time. Typically, after-tax contributions to the plans are invested and any earnings grow tax-deferred. If distributions are used to pay qualified education expenses, they may be tax-free.
There was a drawback to these plans: qualified distributions from non-parent-owned 529 plans were treated as untaxed income of the beneficiary. Since a student’s income plays an important role in determining financial aid eligibility, a distribution from a non-parent-owned 529 plan had the potential to reduce the amount of financial aid a student received by 50 percent, reported Kiplinger.
However, the Consolidated Appropriations Act included a simplification of the Free Application for Federal Student Aid (FAFSA). Beginning with the 2024-25 school year, distributions from 529 plans owned by third parties will no longer be treated as untaxed income, so a student’s financial aid eligibility remains unaffected.
529 plans also can be effective estate and gift planning tools. From a planning perspective, contributions to 529 accounts are gifts to the beneficiary. In 2022, the annual gift tax exclusion, per donee, is $16,000. So, a 529 plan account owner could contribute up to that amount without triggering gift taxes. Alternatively, the IRS allows larger contributions to be made up front and treats them as though the amount was contributed over a five-year period, without incurring gift tax.
If you would like to learn more or gift an education to a child, get in touch.
Weekly Focus – Think About It
“Every child deserves a champion – an adult who will never give up on them, who understands the power of connection and insists that they become the best that they can possibly be.”
—Dr. Rita Pierson, educator
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