For the Defense - Volume 3, Issue 1 - 2018 - 41

For parents and grandparents with cash
assets available, Section 529 Plans allow you to
contribute up to $14,000 per child, per plan,
per year. Under the current tax code, these
contributions may be tax-deductible. Section 529
Plans also allow a person to contribute up to five
years' worth of gifts, not to exceed $70,000 in
one year, which allows the money to compound
quicker. For grandparents in some states, this
entire gift is tax-deductible in the year it is
made. When an account distribution from the
529 Plan is made directly to the higher education
institution, the distribution is always tax free.
The distribution occurs in the year the expenses
were incurred. It is important to check with your
tax advisor to be sure of the tax rules in your
state.

Ways to Save with the Pennsylvania
Section 529 Plans
There are over one hundred Section 529
Plans across the country to choose from. In
Pennsylvania, there are some very distinct
advantages. Pennsylvania offers both a savings
variety Section 529 Plan and a prepaid tuition
Section 529 Plan.
The savings variety plan is provided by The
Vanguard Group, which is regarded as one of the
top passive-index investment managers in the
world. The variety of investment options include
a socially responsible equity portfolio with no
cost to enroll, underlying expenses ranging from
0.33% to 0.46% per year, and an additional $18
fee if statements are not received electronically
(this fee will be waived if you receive your
statements electronically).
The prepaid tuition Section 529 Plan, the
Pennsylvania 529 Guaranteed Savings Plan, allows
you to lock-in today's college rates to pay for
tomorrow's expenses without the potential risk
that exists by investing in the stock and bond
markets. These plans significantly curtail the risk
of losing your investment, but that comes at the
price of slower investment growth. Regardless
of when or how much tuition increases in the
future, if a family saves enough today, they are
guaranteed a pre-determined amount in the
future.

The Pennsylvania prepaid tuition plan also
provides a guarantee for out-of-state and
private schools, unlike many other states. This
account can be used for colleges and universities,
including community colleges, law, medical,
or business schools, as well as many career or
technical schools and colleges domestically and
abroad.
While the Commonwealth of Pennsylvania
offers two great plans, there is no requirement
that a family choose either of these plans.
Moreover, although it is generally advantageous
to use the plan for the state where you live in
order to take advantage of tax deductions or
credits, this is not the case in Pennsylvania. In
Pennsylvania, contributions to any Section 529
Plan up to the gift tax annual exclusion amount
($14,000 in 2017) per beneficiary are deductible.
What's more, spouses can each take the
deductions as long as both have at least $14,000
in income.

Additional Benefits of the
Pennsylvania 529 Plan
The Commonwealth of Pennsylvania offers
two rewards programs linked to the state Section
529 Plans. The first being the "Upromise"
rewards program. This program allows investors/
members to earn cash back for college on every
day purchases. There are over 850 brands which
offer cash back to Upromise members; Best Buy,
Staples, Macy's, etc. An investor can link their
Upromise account directly to the Pennsylvania
Section 529 Plan, allowing their money to
grow over time. Parents, grandparents, aunts,
uncles, and even friends can join Upromise and
have their rewards directed to the beneficiary's
account of their choice.
The second program offered to Pennsylvania
residents is "Tuition Rewards." This program
guarantees tuition discounts at nearly 400
colleges and universities in 45 states, including
over 50 in Pennsylvania, that participate in the
privately-run SAGE Scholars Program. Just for
signing up, a participant receives 500 points.
Each quarter an account holder can earn Tuition
Rewards equal to 2.5% of the value of the 529
account, with a minimum of 250 points per

Vol. 3, Issue 1

l

For The Defense

41



Table of Contents for the Digital Edition of For the Defense - Volume 3, Issue 1 - 2018

Contents
For the Defense - Volume 3, Issue 1 - 2018 - 1
For the Defense - Volume 3, Issue 1 - 2018 - 2
For the Defense - Volume 3, Issue 1 - 2018 - Contents
For the Defense - Volume 3, Issue 1 - 2018 - 4
For the Defense - Volume 3, Issue 1 - 2018 - 5
For the Defense - Volume 3, Issue 1 - 2018 - 6
For the Defense - Volume 3, Issue 1 - 2018 - 7
For the Defense - Volume 3, Issue 1 - 2018 - 8
For the Defense - Volume 3, Issue 1 - 2018 - 9
For the Defense - Volume 3, Issue 1 - 2018 - 10
For the Defense - Volume 3, Issue 1 - 2018 - 11
For the Defense - Volume 3, Issue 1 - 2018 - 12
For the Defense - Volume 3, Issue 1 - 2018 - 13
For the Defense - Volume 3, Issue 1 - 2018 - 14
For the Defense - Volume 3, Issue 1 - 2018 - 15
For the Defense - Volume 3, Issue 1 - 2018 - 16
For the Defense - Volume 3, Issue 1 - 2018 - 17
For the Defense - Volume 3, Issue 1 - 2018 - 18
For the Defense - Volume 3, Issue 1 - 2018 - 19
For the Defense - Volume 3, Issue 1 - 2018 - 20
For the Defense - Volume 3, Issue 1 - 2018 - 21
For the Defense - Volume 3, Issue 1 - 2018 - 22
For the Defense - Volume 3, Issue 1 - 2018 - 23
For the Defense - Volume 3, Issue 1 - 2018 - 24
For the Defense - Volume 3, Issue 1 - 2018 - 25
For the Defense - Volume 3, Issue 1 - 2018 - 26
For the Defense - Volume 3, Issue 1 - 2018 - 27
For the Defense - Volume 3, Issue 1 - 2018 - 28
For the Defense - Volume 3, Issue 1 - 2018 - 29
For the Defense - Volume 3, Issue 1 - 2018 - 30
For the Defense - Volume 3, Issue 1 - 2018 - 31
For the Defense - Volume 3, Issue 1 - 2018 - 32
For the Defense - Volume 3, Issue 1 - 2018 - 33
For the Defense - Volume 3, Issue 1 - 2018 - 34
For the Defense - Volume 3, Issue 1 - 2018 - 35
For the Defense - Volume 3, Issue 1 - 2018 - 36
For the Defense - Volume 3, Issue 1 - 2018 - 37
For the Defense - Volume 3, Issue 1 - 2018 - 38
For the Defense - Volume 3, Issue 1 - 2018 - 39
For the Defense - Volume 3, Issue 1 - 2018 - 40
For the Defense - Volume 3, Issue 1 - 2018 - 41
For the Defense - Volume 3, Issue 1 - 2018 - 42
For the Defense - Volume 3, Issue 1 - 2018 - 43
For the Defense - Volume 3, Issue 1 - 2018 - 44
For the Defense - Volume 3, Issue 1 - 2018 - 45
For the Defense - Volume 3, Issue 1 - 2018 - 46
For the Defense - Volume 3, Issue 1 - 2018 - 47
For the Defense - Volume 3, Issue 1 - 2018 - 48
For the Defense - Volume 3, Issue 1 - 2018 - 49
For the Defense - Volume 3, Issue 1 - 2018 - 50
For the Defense - Volume 3, Issue 1 - 2018 - 51
For the Defense - Volume 3, Issue 1 - 2018 - 52
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For the Defense - Volume 3, Issue 1 - 2018 - 54
For the Defense - Volume 3, Issue 1 - 2018 - 55
For the Defense - Volume 3, Issue 1 - 2018 - 56
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