In 2023, the SECURE Act 2.0 for retirement savings becomes federal law, reshaping tax incentives for years to come by making numerous changes to existing retirement account rules and related tax breaks. Though there are many changes, below are some of the ones that will impact high wage earners, those still working, and those who have or are about to retire.
What happens if your child ends up not spending all (or any) of the funds in their 529 plan? Maybe they received a scholarship or opted to enroll in a U.S. Military Academy, and now you need to figure out what to do with the money you saved for them. Although it may seem farfetched that your child will not need every penny, about 10% of families end up having funds leftover that the original beneficiary did not need. To put that in perspective, there are more than 14.8 million 529 plan accounts, and at the end of 2020, they were holding a record-high of $425 billion! If you and your child find yourselves in such a predicament, don’t worry, you have plenty of options to ensure the remaining money is put to good use.
According to an article by Forbes, the average total cost of a four-year degree is now over $100,000, more than double, even when accounting for inflation, than it was 30 years ago. Perhaps even more shocking, the total college price tag grew nearly eight times as fast as wages over the same period. Working your way through college is nearly impossible and it’s no secret that student loans make up the largest slice of non-housing debt in the U.S.
So how do you plan for and advise your child as they weigh their post high school graduation options?
Do you find saving for college a daunting task?
You are not alone. It’s important to know that you have options for tax-deferred education savings.
The 529 is the most popular college savings plan available. We’ve identified 15 things you should know in order to get the most out of a 529 Plan, with a focus on Oregon 529 Plans.