When Lu Yichen returned home, there was no sound at home, and Vivian was able to get up early so regularly on weekend mornings. He tiptoed back to his room, closed the door and went into the cloakroom to change into his home clothes, and then he lay down comfortably in a large shape, and his sleepiness in the morning was forcibly interrupted, and now he felt a little sleepy again, and fell into a deep sleep......

When he woke up again, it was just noon, he looked at his phone and sent a message to Vivian, "It's not early, remember to go to lunch, don't read and forget." ”

As a result, he waited for several minutes and didn't get a reply, he shook his head helplessly, it is estimated that she is really reading the book and is fascinated, considering that she is in the library, Lu Yichen does not dare to call, so he can only wait for her to reply later.

He stretched and walked down the stairs. As a result, his appearance startled his mother who was sitting on the sofa in the living room.

"When did you come back? Why don't you say anything, I was just thinking about calling you. "Mom was very dissatisfied because she was scared.

"You said yesterday that you wanted to talk to me, and I didn't think about it all the time, so I rushed back early in the morning." Lu Yichen's expression looked very sincere, if he didn't understand him, he would probably really believe it.

"Come on, you have to be really worried, why didn't I see you back yesterday?" Knowing the son Mo Ruomu, it is not so easy to deceive his mother. Seeing that Lu Yichen was back, her mother beckoned her father and Fei'er to sit on the sofa together.

After the family of four sat down, Mom and Dad exchanged a look, Dad turned around and went into the study, took out a pile of papers, spread them on the coffee table, and Mom began to speak.

"I called Chen Chen back today, the most important thing is that there is something I want to tell you two." The mother's eyes were soft and full of love as she looked at the two children.

Fei'er and Lu Yichen both looked at their mother very obediently at this time and motioned for her to continue.

"We have four children, and we have always treated them equally. So since you were born, your father and I have bought you a lot of investment and financial management projects, some for school, and some for you to start a family in the future. Since the two sisters went to college, we have handed over to them, and we have already given them everything that should be given. The two of you originally planned to tell you last year, but Chen Chen suddenly took a gap year, so we thought about waiting for him to come back and arrange it together. The mother said to make sure that both children understood.

"This one is the 529 plan for the two of you. I bought it from birth, and the original plan was that you could start using it when you go to college. Since the money in this plan can only be used to pay for education-related expenses, your dad and I think we should take it out now, and we can discuss how to spend it. Both of you are full prizes, so there is no question of tuition. ”

According to U.S. federal law, the money from the 529 plan can only be used for tuition, books, tuition and fees, electronic products needed in school (such as printers, computers, educational software and network equipment), room and board in school, or rent outside the school. Any other avenue of spending is not eligible for the 529 plan. Once your money is used for non-education expenses, you will receive a large tax penalty, which will also have a big impact on the student himself.

The parents of the Lu family created the 529 plan for each child when they were born, and the amount of money bought was the highest under the allowable amount, but the children of the Lu family were more competitive than one another, the eldest sister Lu Yue'er was admitted to the law school of the school as an undergraduate, and the second sister Lu Xinger was admitted to the school's MBA as an undergraduate at Penn University, both of them were top students, so the money of 529 was not spent on tuition, fortunately, it could also be used for books and miscellaneous fees and off-campus rent, but because the amount bought by parents was too high, so most of it was not spent. In the end, the excess money was withdrawn after paying the back taxes.

I thought that the eldest and second child were so good, but when they came to Fei'er and Lu Yichen, it seemed that their studies were not very good, but they didn't expect that the two of them still got the admission ticket to the university with their expertise in ice hockey and figure skating, and it didn't cost money. The Lu family's parents were really speechless, and they didn't know how to spend the money in 529.

Although it is an investment by parents, it is an asset in the name of the child after all, so after thinking about it, parents should still ask their children for advice to see how to spend the money as much as possible. If you really can't spend it, you can only make up the tax and take it out.

What a sweet annoyance!!

(The author's popular science post is here again: everyone applauds and welcomes.)

With the cost of U.S. colleges and student debt on the rise, more parents living in the U.S. need to find different ways to ease the financial burden of higher education. Fortunately, the 529 Education Fund program can help these families. This unique storage tool can help parents get more tax deduction benefits and allow parents to put more money into their children's future education fund. Similar to a 401K retirement plan, a 529 plan allows you to invest money in a stable investment portfolio, which is typically managed by the government or a large investment firm. The prerequisite for a good education is that you can afford to pay for your education.

The 529 Education Fund Program is simply a storage tool that can enjoy tax incentives and can help investors put their money in an account with a steady appreciation for future education expenditures. The 529 Education Fund program was named after Section 529 of the Internal Revenue Act, enacted in 1996, and today there is at least one 529 plan in every state in the United States. These schemes are largely run and managed by state agencies and large management companies.

How a 529 plan works and three common 529 plan types

The most common 529 plan: The 529 Education Fund offers a very diverse range of investment options, usually including a mutual fund portfolio and an FDIC insurance savings account. There are some plans that don't have any minimum investment limit, and some can set up a 529 plan account for more than 25 yuan. Once you've set up your own account, you can invest as much as you want. The limit for a 529 plan account is around $200,000 to $500,000. In addition, many accounts will directly deduct the corresponding management fee from the current balance, which will allow investors to pay as little as possible.

【Advisor-sold 529 college saving plan】Advisor-sold 529 plan is basically the same as the ordinary 529 education fund plan, the only difference is that this type of 529 plan has a "supervisor", that is, to provide professional financial advisors, this financial adviser can help you choose a reasonable investment project, and help you allocate the assets in hand in the most reasonable way.

【529 Prepaid Tuition College Saving Plans】This kind of program generally allows you to prepay the tuition of the future university at the current price in advance, so the advantage of paying the tuition in advance is that even if the tuition fee has rocketed up a lot by the time your child enters the school in the future, you can still pay the tuition according to the price at the time of investment. However, in general, state legislatures set and limit the limits on the amount of tuition fees to be paid. And the child's future school will charge a certain fee compulsorily.

When you start to invest in the 529 plan, the profits from the investment are tax-free, Uncle Sam will not forcibly deduct a part of your money for taxes, and the money you invest will grow in the form of compound interest. In addition, if the money is ultimately used for educational investment, there will be no tax on your use. For example, use the money to pay for tuition, compulsory education or books.

However, if you use the money for any non-education expenses, you will trigger the non-compliance limit, so all profits will be subject to federal tax and a 10% penalty on normal income when used. In addition, you may also need to surrender any tax benefits you received for investing in a 529 plan.

If you need to use 529 funds to pay for non-education expenses, then you need to consult a financial advisor or professional tax professional to discuss how best to withdraw the money. Your financial advisor will work out the best way for you to withdraw the money.

Don't have children yet, should I buy a 529 plan in advance?

The answer is "yes", you can buy a 529 plan before you plan to have a child, you can set the beneficiary as yourself before the child is born, and when the child is born, you can convert the beneficiary into your own child. If your child does not end up in college, you can transfer the benefit to any beneficiary without any penalty. Many programs do not necessarily require your child to enter college immediately after graduating from high school, and you will need to contact your program manager to find out the specific restrictions.

Common concerns about the 529 Plan

Many people don't invest in 529 because they have a lot of concerns. I'm one of them. The most useful thing about this lecture is that it cleared up my concerns.

Concern 1: My child decided to play in the NBA at the age of 18 and didn't go to college, what should I do?

Answer: It doesn't matter, you can change the beneficiary of the 529 Plan to your other child, or your grandchildren, or even yourself (if you will be going back to college).

Concern 2: My child is very good and gets a full scholarship, what should I do?

Answer: First of all, congratulations! In addition to changing the beneficiary as mentioned above, you can also take out the money. Of course, you will need to pay the tax, but there is no penalty. So there is nothing to lose compared to if you don't invest in 529.

Concern 3: I have saved 529, will my child not be able to get some financial aid?

Answer: Some bursaries do depend on the assets and income of the parents. Generally speaking, the assets in 529 are a very small fraction of your total assets. So in most cases, 529 is unlikely to affect your child's chances of getting financial aid. ）