529 Educational Accounts for Kindergarteners

529 Education Accounts offer a unique opportunity to invest in your child's future from an early age. While it might seem premature to think about college when your child is in kindergarten, setting up a 529 account can provide substantial benefits in the long run. By starting early, you can take advantage of the power of compounding. Every dollar you contribute to the account has the potential to grow over time, thanks to tax-free investment earnings. This means that not only are you saving on taxes for every dollar you invest, but those savings can accumulate and compound over the years. Furthermore, by starting to save now, you can spread out the financial burden of higher education. Rather than facing a hefty expense all at once when your child reaches college age, you'll have been consistently saving and investing over the years, making the cost more manageable. Setting up a 529 education account for your child in kindergarten lays the foundation for a secure and financially sound future, ensuring they have the resources they need to pursue their educational goals without unnecessary financial stress.

1. Your current kindergarten student must plan to return to Value Schools for 1st grade.
2. The 529 Education Account owner must be over the age of 18, but they don’t need to be a parent or guardian.

The Account Owner and Beneficiary (the student) must be U.S. citizens or residents with a valid Social Security number orIndividual Taxpayer Identification Number (ITIN).

Yes, you can be a 529 Account Owner if you have a taxpayer identification number or a valid Social Security Number.  If you reside in the U.S. with a legal, non-expired visa that allows you to work and maintain an Individual Taxpayer Identification Number (ITIN) you can also participate. However, DACA and work permit holders are excluded from this option, as both statuses are not considered to be visas. However, if you don't have a valid Social Security Number or ITIN, your child can still participate in the program. You and your family can designate someone you trust who has a Social Security Number or taxpayer identification number registered with the Internal Revenue Service to be the account owner. It's important to note that the owner of the 529 account does not necessarily have to be a relative of the beneficiary (the student) of the account.

The owner of the account will have control and access to the funds. This means that whoever is designated as the owner of the account will have the authority to manage and withdraw funds as needed for qualified educational expenses.

If the owner of the 529 Education Account becomes unable to manage the funds for any reason, they can designate an alternate individual to take over the account. This designated individual must also have a valid Social Security Number or taxpayer identification number. It's advisable to discuss setting up an alternate account holder with your financial advisor for assistance in ensuring smooth management of the account in such circumstances.

The money invested in your 529 account CAN be used for:

• College tuition fees
• 4-year college or university
• 2-year trade or educational school (if Title IV Institution)
• Room and board
• Books and supplies (e.g., textbooks, binders, notebooks, pens, pencils, etc.)
• Laptop or desktop
• Internet
• Webcam or software required for classes
• Special needs adaptive equipment
• Existing student loans
• Study abroad (tuition, room and board)
• Graduate or professional school

Absolutely, we strongly encourage it! Since the account offers tax-free, compounding investment benefits, the more you contribute and the earlier you do so, the greater the returns when your daughter or son graduates from high school. If you opt to use Northwestern Mutual as your financial advisor, they can assist you in making informed and enduring investment decisions for your child's 529 Educational account.

You can withdraw money from the 529 Educational Account at any time, provided that the funds are used for valid educational expenses as defined by the IRS. It's crucial to ensure that withdrawals are for qualified expenses to avoid tax consequences and penalties.

Please contact your school 529 Education Account representative by May 1, 2024, to participate in the program.

• Downtown Value School: Mrs. Patterson at [email protected]
• Everest Value School: Ms. Castaneda at [email protected]

The average growth of an account varies and includes many factors. All investments carry some level of risk including the potential loss of all money invested. No investment strategy can guarantee a profit or protect against loss. There is a industry-wide expectation the account will grow at a rate of 6%. Talk to your financial advisor for more information.

Absolutely not. Once you set up an account, the funds belong to you, and you retain ownership regardless of your child's educational path. Whether your child continues at Value Schools or attends another educational institution, the funds remain accessible and under your control, either managed personally or with the assistance of a financial advisor like Northwestern Mutual.