Scott Flowers, Wealth Advisor

People want to know — “Should I open an ESA or a 529 plan for my child?”

If the money is only for K-12 schools then an Education Savings Account (ESA) makes sense.  With a $2,000 annual contribution limit, distributions are tax-free if they are “qualified education expenses”.  These include:  tuition, books, room, board, etc.  However, certain income limits might restrict parents from contributing to ESA’s. 

If the money is for college or post secondary education then a 529 plan may be a suitable option.  With lifetime contribution limits up to $250,000 per child, and distributions tax-free for qualified expenses there is a lot of flexibility.  Contact your financial professional today to explore the best options for your family.  

To find out more about college planning, use our college planning calculator located on our Investment Tools page of our website.  This is an easy way to determine how much money you may need to be saving for the future.

Submitted by Scott Flowers, Wealth Advisor