Financial Planning

529 College Savings Plans and Tax-Free Growth

College is getting tougher and tougher to pay for, but a 529 plan can be a really big help. Did you know that contributions to 529 plans are not taxable on the growth or income generated when spent on tuition or other approved expenses? Tax-free does not appear many times in the American Tax Code.

If you find yourself with a looming estate tax at your passing, a 529 savings plan may be used to shrink your estate, which could save you Washington and/or Federal estate taxes and in addition help fund your grandchildren’s education. You should consult your tax or legal advisor when utilizing this strategy.

You can start a 529 savings plan for as little as $25. The Iowa Plan (we in Washington enjoy no income tax at the state level so you can use any state plan), has low cost Vanguard funds and a low minimum of $25 to start and as little as $25 for additions to the plan. Can you really say you cannot afford to start a 529 plan, especially since this can be a significant source of funding for education? With 529 Plans, you also have the flexibility to switch the plan to another family members name. We have seen in our practice when one child in a family receives a college scholarship, the family can just switch the funding to another child.

These plans will have investment options containing stocks and bond funds and you should work with your financial advisor to make sure the investments are appropriate for your goals, risk tolerance and other objectives.

Here is a link to the Iowa Plan:


Deka Wiebusch AIF® CRPC® is a financial advisor at Skyline Advisors, a locally owned and operated Registered Investment Advisor providing money management and financial planning services.  Skyline Advisors is located at 405 32nd St., Ste 201 in Bellingham and also at

Mark can be reached at 360-671-1621 or at  


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