May 21, 2019
What is a great gift for your graduate?
Luggage? Some dormitory décor for when they go off to college?
Might we suggest a gift that is guaranteed to be useful for their new educational venture: The gift of 529 educational funds.
Most 529 college savings plans accept gift contributions by check and online. Account owners enroll in the different gift programs online. Some programs use a unique code that others can use to contribute, others use vouchers or customized contribution forms.
The methods for giving gifts to 529 accounts vary by state, and you should look at potential tax implications for contributing.
There is no end to the reasons for giving. In addition to graduation, contributing to a friend or relative’s college savings is an easy and smart gift idea for many other occasions. And parents can give that easy, smart answer when others ask, “What should I get for them?”
- Birthdays. Invite grandparents, aunts, uncles, and friends to contribute to your child’s college education in lieu of other presents. Let the beauty of tax-deferred compounding add more potential for growth over time.
- New arrival. Get a newborn started from day one. Once the baby is born and has a Social Security Number, the account owner can start saving.
- Allowance. Get your beneficiary involved in college savings. They can contribute a portion of their allowance to their 529 account. Consider it a gift to themselves. You can build a college-bound identity while teaching principles of financial literacy.
- Holidays and special occasions. 529 contributions are perfect for holiday gifts, but other special days can also create gifting traditions. Give grandkids a 529 valentine. Plant seeds for college savings (along with a tree) on Arbor Day. And don’t forget family and community events. Aunt Martha might be rusty at pirouettes, but she can attend your child’s ballet recital and contribute toward a degree that may or may not involve choreography.
Whether it’s a Pre-K promotion, a new driver’s license, or a bar mitzvah, contributing to a 529 plan can be a vehicle for family and friends to show their love for the beneficiary while supporting their future.
About the author
my529 is Utah’s official nonprofit 529 educational savings plan. To learn more, visit my529.org, call toll-free at 800.418.2551, or email firstname.lastname@example.org.