A 529 Plan Is Great for Grad School, Too (script)

SHORTCUTS

529 Plan Details:

Enter your state:

World's Simplest College Calculator:

How old is your child?

Find a 529 Pro:

Enter your zip code:

Enroll In a 529 Plan:

View a list of participating plans

OPTIONS

COLLEGE SAVINGS 101

A 529 plan is great for grad school, too (Script)

08/24/2011

QUESTION:
Dear Joe,



My 30-year-old son has just graduated with his undergraduate degree (finally). My question is this: Can I now start a 529 plan for his graduate degree? He is uncertain just when he will go. If he should not go, can I transfer the money for my grandson's education? 



Rosemary

Watch Video

ANSWER:
Dear Rosemary,



First of all, congratulations to your son (and to you) for successfully completing his undergraduate studies! If he is thinking about graduate school, and you wish to help pay for it, a 529 plan can be a great vehicle for tax-free savings. Since there are no age limits with 529 plans, it won’t matter how old your son is when he decides to go back to graduate school.

Most graduate schools do fit the definition of an eligible education institution for purposes of your 529 plan, and you can verify eligibility for any particular school by accessing the U.S. Department of Education's school code look-up at ed.gov and determining if the school is listed as having a "school code."



If your son changes his mind about grad school, the leftover funds in your 529 plan can be redirected to your grandson or other family member. You simply change the beneficiary on the account, or transfer a portion of the funds to another 529 plan with your grandson as beneficiary.


If you switch the account to a grandson, your son who was the original beneficiary may have to report a gift for gift-tax purposes depending on the value of the transfer. So be sure to look into that when the time comes to make that change.

Other recent questions

»529s and Financial Aid (Video) (11/19/2014)
»529s and Financial Aid (Script) (11/19/2014)
»What are the best ways to maximize the savings in my 529 plan? (Video) (10/14/2014)
»What are the steps involved in setting up a 529 account? (Script) (09/15/2014)
»What are the steps involved in setting up a 529 account? (Video) (09/15/2014)
»What is the first step in getting started with a 529 plan? (Script) (09/05/2014)
»What is the first step in getting started with a 529 plan? (Video) (09/05/2014)
»Coverdell ESA vs. 529 Plan: Which to choose? (Video) (07/15/2013)
»Coverdell ESA vs. 529 Plan: Which to choose? (Script) (07/15/2013)
»What is the best 529 plan for me? (Video) (07/10/2013)
»What is the best 529 plan for me? (Script) (07/10/2013)
»What happens to my 529 if my child gets a scholarship? (Video) (07/02/2013)
»What happens to my 529 if my child gets a scholarship? (Script) (07/02/2013)
»Can grandparents open a 529? (Video) (06/20/2013)
»Can grandparents open a 529? (Script) (06/20/2013)
»Do I have to use my own state's 529 plan? (Video) (06/12/2013)
»Do I have to use my own state's 529 plan? (Script) (06/12/2013)
»529 Plans: Tax Benefits of a 529 Plan (Video) (06/07/2013)
»529 Plans: Tax Benefits of a 529 Plan (Script) (06/07/2013)
»What are the Pros & Cons of 529 plans? (Video) (05/30/2013)

My College Savings


Help us personalize our site for you.

1. I am a ...
Please select an option.
2. My child is ...
Years Old
Please enter the age of your child.
3. I have a 529 plan for this child
Please select an option.
 

Reset email successfully sent.
Please check your inbox.

Close
page loadtime mark

Advertisement


close