GA 529 Plan: Upcoming Changes
If you are a Georgia resident with a current GA 529 plan or you plan to enroll in the near future, take note that there have been some recent changes to the plan. As we wrote in a blog last year, college cost is rising. If you intend to fund your child’s higher education, either fully or partially, early planning is essential.
What is the GA 529 plan?
The Georgia Path2College 529 Plan is one of the most popular investment vehicles for saving for college and the one most widely seen at Wiser Wealth Management. 529 plans are invested, grown and distributed tax free if used for certain qualifying expenses, such as tuition and certain fees. Families can also access up to $10,000 annually for K-12 school tuition. There are no contribution limits, but the maximum account size allowed for Georgia is currently $235,000. Parents, grandparents, other relatives or family friends can gift up to the annual exclusion of $15,000 or up to 5 years prorated at once of $75,000 per filer or $150,000 for married filers.
What changes are coming?
For 2021 contributions, Georgia has allowed an increased deductible contribution of up to $8,000 per year per beneficiary for joint filers, and $4,000 for single filers for the Path2College plan. GA 529 plans are invested in certain individual mutual funds or managed as age-based funds that move from conservative to aggressive by large investment companies.
Starting in May 2021, Georgia families can look forward to other improvements to the plan. The plan recently surpassed the $4 billion mark in assets, and at their annual meeting in March 2021, the Georgia Higher Education Savings Plan Board approved lowering program fees by nearly 70%. The board also decided to waive the state’s administrative fee and approved a new lower cost contract with TIAA-CREF Tuition Financing, Inc. who manages the plan.
What do the changes mean?
This means the program management and administrative fees will fall significantly from 0.13% to 0.04%. With the recent increase in deductions and these new improvements in the fund, the Georgia Path2College Plan could become one of the most attractive in the country. If you have any questions, please let us know. At Wiser, we do not personally manage GA 529 funds; so we usually suggest GA residents invest through this plan. As fiduciaries, we believe in lowering costs and looking out for the best interest of our clients and we think the GA 529 plan is a great step for Georgians planning to fund their children’s higher education.
Matthews Barnett, CFP®, ChFC®, CLU®
Financial Advisor
Download our free guide on “3 Ways to Grow and Protect Your Portfolio”.
Click here to schedule a consultation with one of our financial planners.
Have more questions? Contact Us
Recent posts
Share This Story, Choose Your Platform!
Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.
Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.
To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.