How Can Grandparents and Family Members Invest in a Child's Education?

Instead of giving cash for the holidays, have you thought about gifting to your grandchild's 529 educational fund? Whether you're a grandparent or a family member searching for the perfect present, consider a meaningful contribution to their 529 savings account. Even a modest amount can have a significant impact on their future.

Instead of handing over cash that might vanish quickly, consider making a contribution to the child's 529 savings account this holiday season. Here are a few handy tips on how to approach the 529.

Key considerations:

  • To contribute directly to the 529 account or provide a check for it, start by discussing this with the child's parent to acquire the necessary account details.
  • Choose the amount that is right for you. There is no minimum contribution amount for 529 accounts and even a small amount can make a difference in the long run.
  • Consider setting up recurring contributions for added convenience. This is an excellent way to steadily build the child's college fund over time.
  • Personalize your gift by including a heartfelt card for the child, explaining the significance of the contribution. Parents can hold onto these letters and present them to the child when they enroll in the school funded by the 529 account. You can also enclose a certificate from the 529 plan, so the child knows the extent of your contribution.

Giving the gift of a contribution to a child's 529 savings account during the holidays is a meaningful and generous gesture that will support them in achieving their educational aspirations. This is a gift that will continue to benefit them for years to come.

To learn more about 529 accounts, click here.

 

DISCLOSURE

Before buying a 529 Plan, you should find out about the particular plan you are considering.  Request an offering circular or official statement, which contains pertinent details such as objectives, risks and fees, from your Financial Advisor.  Please read it carefully before investing or sending money.  Many states offer favorable tax treatment or other valuable benefits to their residents in connection with investments in their own 529 College Savings plan.  529 College Savings plan offered by each state differ significantly in features and benefits.  The optimal plan for you as an investor depends on your individual objectives and circumstances.  In comparing plans, each investor should consider each plans investment options, fees and state tax implications, out of state 529 plans may not have the same tax benefits as those offered to in state residents.

Qualified expenses include tuition, fees, room and board, books and other supplies.  Distributions may be subject to certain state taxes.  For non-qualified expenses a 10% federal mandated penalty on the earnings withdrawn will apply.

The presentation is intended for informational purposes only.  The information provided herein is general in nature and should not be construed as a recommendation or an offer or solicitation to buy or sell any securities nor does it represent legal or tax advice.  Oppenheimer & Co. Inc., nor any of its employees or affiliates, does not provide legal or tax advice.  However, your Oppenheimer Financial Advisor will work with clients, their attorneys and their tax professionals to help ensure all of their needs are met and properly executed.

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