529 College Savings Plans

529 college savings plans Tailored for Your Portfolio

Invest in Your Child or Grandchild’s Future With a Tax-Advantaged Savings Plan

Named after Section 529 of the Internal Revenue Code, 529 Plans are broad-purposed, tax-advantaged education savings plans that can be used for a diverse array of education-related expenses. Examples include K-12 tuition, technical and vocational school tuition, room and board at college, textbooks or graduate education expenses.



Fullerton Financial Planning has helped many parents and grandparents in Phoenix establish and fund 529 Plans for children, grandchildren and other family members. If you want to help fund a loved one’s future educational expenses while also benefiting from state and federal tax advantages, these plans can be the ideal option.

What Savers Need to Know About 529 Plans

  • Potential Tax Benefits

    Federal Tax Advantages:

    Contributions to a 529 Plan experience tax-deferred growth. Withdrawals from a 529 Plan for qualifying educational expenses are tax-free. 


    Arizona Tax Advantages:

    Arizona 529 Plans allow state taxpayers to enjoy tax deductions for contributions, potentially reducing their state tax liability. The state offers one of the more generous deductions in the nation at $2,000 per year for individuals and up to $4,000 per year for couples filing jointly. 


  • Flexible Use

    529 Plan funds can be used for tuition at eligible K-12 institutions, colleges, universities or trade schools as well as qualifying student loan repayments. Funds can also be used to purchase textbooks, lab supplies or any necessary equipment required for completion of coursework.

     

    Even off-campus housing and groceries can potentially be paid for using 529 Plan funds as long as the expense does not exceed the cost of on-campus living accommodations or the college’s meal plan cost. Documentation to corroborate the college or university’s rates may be necessary to show expenses qualify in some circumstances.


  • High Contribution Limits

    Contributions to 529 Plans might be an attractive option for individuals who have already met their annual contribution limits for their other retirement savings accounts or are looking for alternative tax-advantaged investment opportunities. Maximum account balances are periodically adjusted. 

How Fullerton Financial Planning Helps Phoenix Families With 529 Plan Formation

Personalized Plan Selection Guidance

Our financial advisors can help you understand the different 529 Plans available to you and which may offer preferable options, fees and tax advantages for your situation.


Strategic Contribution Planning

How your contributions are scheduled and the amounts you contribute annually may play a role in your overarching tax strategy. We can assist in the development of strategies designed to accommodate beneficiary needs as well as your other financial obligations and long-term goals.


Multigenerational Planning

A 529 Plan can potentially be structured for multigenerational educational funding with changing beneficiaries. In other words, the principal you invest and the tax-free growth earned in a 529 Plan you established for your children can be passed on to your nieces, nephews or grandchildren without incurring any penalties.


529 Plan Management

529 Plans often have features that are not dissimilar from other types of investment accounts, including age-based portfolios that adjust as the beneficiary nears college age. Our financial advisors can assist with the adjustment and management of these investments and provide guidance to align your 529 Plan with your preferred risk tolerance and time horizon.

frequently asked questions

Arizona 529 Plan FAQs

  • What If the Beneficiary Does Not Attend a Qualifying Educational Institution or Does Not Finish?

    The account owner will maintain control of the account and the funds. They can choose to name a new beneficiary or leave the funds in the account in the event the beneficiary decides to return to school in the future. Any unused money withdrawn by the account owner that is not used for qualifying educational expenses is subject to federal and state income tax as well as a federal 10 percent penalty on the earnings portion. The principal is funded using after-tax dollars and will not be taxed or penalized.  


    There are narrow circumstances in which the funds can be withdrawn by the account holder without incurring the 10 percent penalty. Examples include scenarios in which the beneficiary dies or suffered a disability that prevents them from pursuing eligible educational opportunities. 


    Account holders may also be able to avoid the tax penalty for withdrawals if the beneficiary earned a scholarship, although only the scholarship’s monetary value can be withdrawn without incurring the penalty.  

  • Are Beneficiaries Still Eligible for Financial Aid?

    Yes. 529 Plan funds do not count toward the income of parents or the student during needs testing for financial aid. However, up to 5.64 percent of the beneficiary’s account balance may be considered by federal financial aid programs when assessing eligibility for need-based financial aid. 

  • Are 529 Plans Right for Your Family?

    Phoenix savers seeking tax-advantaged savings options to fund the future education of family members or friends may benefit from learning more about 529 Plans. Speak with a Fullerton Financial Planning advisor today by calling (623) 974-0300.