Financial Corner: Choosing a 529 Savings Plan
Editor's Note: This content is sponsored by Aegis Capital
By Aegis Capital
Dec. 10, 2025: With so many 529 savings plans to choose from, it's important to ask a lot of questions in order to select the appropriate plan for you.
Compare the plans offered by different states
If you're interested in opening a 529 savings plan account, consider all your options. You can typically join any state's 529 savings plan, so consider comparing a few different plans in terms of account ownership and beneficiary designation rules, tax benefits, investment options, contribution rules, and costs and fees. Any state that offers a 529 savings plan can provide you with a free packet of information that describes the program and its rules. You can also check out a plan's website.
Account ownership and beneficiary designation rules
When comparing 529 plans, keep plan flexibility in mind with respect to account ownership and beneficiary designation rules. These rules may vary from state to state. As account owner, you'll want to make sure the account works the way you want it to. Generally, the account owner retains ownership and a certain amount of control over the savings plan account. For example, he or she can change the beneficiary of the account or terminate the account and receive a refund of contributions. However, keep in mind that if you terminate the account, you'll typically receive back only a portion of your earnings, if any, and a penalty will generally apply, unless you terminate the account because the beneficiary has died or is disabled. Here are some questions to ask when researching various plans:
-Can I own the account jointly with my spouse or another person?
-Can a trust or other entity be an account owner?
-Can I name a successor owner when I open the account? If not, what happens to the account when I die?
-Must the account owner be a state resident? Must the beneficiary be a state resident?
-What happens if the account owner or beneficiary later moves out of state?
-Are account statements issued only to the account owner or also to the beneficiary?
-If I terminate the account, how much of my contributions and earnings will I get back, and will I pay a penalty?
Tax considerations
Some individuals favor 529 savings plans over other college savings vehicles because of the federal (and sometimes state) tax advantages associated with 529 plans. Let's face it — we all want to keep our taxes to a minimum. No matter which 529 savings plan you join, all qualified withdrawals will be free of federal income tax. But things differ at the state level. States typically exempt the earnings in a 529 savings plan from income tax if the withdrawal is used to pay qualified education
IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Aegis Capital Corp.
Steve & Jane Ircha & Richard Palmadesso
Pictured: Steve & Jane Ircha
Steven Ircha Senior Managing Director 26 Paxton Ave. 914-361-1099
