Dear College Savings Plans Network Blogger –
My newborn grandson is already showing signs of being a mechanical genius. His grip has torque and his interest in bright lights is advanced. This child is clearly going into the trades as a pipefitter or electrician. I understand that with trades, you earn while you learn, and don’t have to pay all the same costs associated with traditional college, which can mean little or no student loan debt. If the costs are so minimal, is it worth it to open a 529 education savings plan? Any insight, not financial advice, is appreciated.
Signed,
Proud Pops
Dear Pops –
Sounds like this kiddo has BIG potential, and a 529 plan could be a great tool for his toolbelt! 529 investment accounts grow tax-deferred, and boast tax-free withdrawals for qualified expenses, including: Registered Apprenticeships, credentialing expenses, college and beyond.
It sounds like your hesitation to open and fund an account is because your little mechanical genius may not need it. May is the key word here. First, think about why you would save (see more on Why). Whether it’s to keep him out of debt, get him a head start towards qualified expenses he may have, or to simply give him a gift he won’t outgrow, a 529 plan can help tick those boxes. Simply put, opening an account is a way to ensure you have some funds ready for him when the time comes.
You sound like a common-sense kind of guy, so I’ll leave you with this: it’s better to save than to borrow. That’s right – exactly what your own Nana would have already told you. Enjoy the new grandbaby and make plans now, while time is on your side.
Next stop? Compare 529 plans to find one that works for you!
About the Author: Marissa Rowe is executive director of the Indiana Education Savings Authority, which administers the Indiana529 savings program with more than $9 billion in assets under management in three plans. A proud first-generation college student, Marissa received her B.A. in Mass Communication from the University of North Carolina Asheville and her M.A. in Philanthropic Studies from the Indiana University Lilly Family School of Philanthropy. She paid off her student loans in 2020 and has 529 plans for her nieces and grandchildren.