Take a Closer Look at Myths Surrounding 529 Plans

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If you want to help pay for your children's college educations, you might want to consider contributing to a 529 plan. With this plan, your earnings grow federally tax-free, as long as the withdrawals are used for qualified higher education expenses such as tuition and room and board.

Yet, you may have heard some things about 529 plans that are keeping you from investing in one. However, these concerns may be more myth than reality, so let's take a look at a few of them.

* "I need a lot of money to contribute to the plan." This myth has essentially no truth to it. Typically, only a modest amount is required to open your 529 plan, and you can generally transfer small sums to it from your checking or savings account.

* "If my child doesn’t go to college, I lose out on the money I've put in." This myth runs counter to one of the 529 plan's greatest benefits: flexibility. If you've named one child (or grandchild) as a beneficiary of a 529 plan, and that child or grandchild decides against pursuing higher education, you can simply change the beneficiary to another eligible family member. Furthermore, if none of your intended beneficiaries will need the 529 plan, you can name yourself the beneficiary and use the money to take classes or receive some other type of qualified education opportunity. In a worst-case scenario, in which the money is never used for education, you will be taxed on the earnings portion of the withdrawals – but had you never contributed to a 529 plan, the funds would have been taxed, anyway. (However, you might be subject to a 10 percent penalty tax, in addition to regular income taxes, again on the earnings portion of the withdrawals.)

* "I have to invest in my own state's plan." Not true. You're free to invest in the 529 plan of any state, no matter where you live. But it could be advantageous for you to invest in your own state's plan, as you might receive some tax breaks for state residents. (The tax issues for 529 plans can be complex, so you will want to consult with your tax advisor about your situation.) Investing in your own state's plan also might provide access to financial aid and scholarship funds, along with possible protection from creditors.

* "A 529 plan will destroy my child’s chances for financial aid." While a 529 plan could affect your child’s financial aid prospects, it might not doom them. And the benefits of building significant assets in a 529 plan could outweigh the potential loss of some needs-based financial aid.

Before investing in a 529 plan, you will want to explore it thoroughly, as you would any investment. You can find details about a 529 plan's investment options, share classes, fees, expenses, risks and other information in the plan's program description or offering statement, which you should read carefully before making any purchasing decisions.

But, in any case, don't let "myths" scare you off from what could be one of your best college-savings vehicles.

This article was written by Edward Jones for use by your local Edward Jones financial advisor. Courtesy of Rob Adams, 71 Main Street, North Adams, MA 01247, 413-664-9253.. Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation. For more information, see EdwardJones.com.

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North Adams Superintendent Honored by Peers

Barbara Malkas is honored with the MASS President's Award. 
NORTH ADAMS, Mass. — Superintendent of Schools Barbara Malkas has been recognized by her peers for her professional accomplishment and her advocacy for students. 
Malkas was presented with the Massachusetts Association of School Superintendents' 2019 President's Award at the association's May conference. 
A member of the MASS executive committee, she has been an educator for more than 32 years in the roles of science teacher, school administrator, district administrator, deputy superintendent, and superintendent. She has been superintendent of the North Adams Public Schools for three years and of the Webster Public Schools for the previous four years.  
She was selected for the award because in each of her districts and roles, she has strived to improve the quality of education for all students, particularly those representing underserved populations. As a MASS committee member, she consistently advocates for the unique needs of students in Western Massachusetts. She also served as the Berkshire County representative to the Superintendents Advisory Council, often reminding the commissioner in a clear and professional manner of the unique conditions in Berkshire County.
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