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I want to start a 529 plan for my son. I am not sure if monthly contribution has to be fixed or I can increase/reduce my contribution as per my financial situation. E.g. if I lose my job I may decide to reduce my contribution or jack it up when I get my annual bonus.

  1. Since the contribution is through payroll, what happens when if I take a break from job?

  2. Can both mom and dad contribute to same 529 account and benefit from tax deductions?

  • What state are you from? 529 plan incentives are issued by state, so in general when asking 529 questions it is useful to include the state in question. – JuiceBox Apr 23 '15 at 18:13
  • I am from Georgia... Where would I find more details regarding flexibity on the amount I am putting every month – prats Apr 23 '15 at 18:17
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    You don't make a commitment of putting in $X per year or $Y per month into the 529 plan and so you are not forced to contribute that much per year or per paycheck etc even if you are laid off, take an unpaid leave of absence, etc., and so don't have money going in regularly from your paycheck. – Dilip Sarwate Apr 24 '15 at 2:55
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It varies by the issuing institution and state, but typically there are some minimum (set by the financial institution) and maximum (set by the state based off of an estimate of the maximum amount college could end up costing) contribution limits and you're free to contribute anywhere in that range annually.

Edit for Georgia:
Maximum contributions: Accepts contributions until all account balances in Georgia's 529 plan for the same beneficiary reach $235,000.

Minimum contributions: $25, or $15 per pay period via payroll deduction.
Source

Also note that it may be possible to go outside of Georgia and get 529 plans from other states, since some states will allow people from out of state to get plans in that state. Georgia looks like it has pretty good 529 plan options, though.

  • Thanks for responding.1) Since the contribution is through payroll, what happens when if I take a break from job. 2) can both mom and dad contribute to same 529 account and benefit from tax deductions? – prats Apr 23 '15 at 18:44
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    1) I think what the above means is that you can add $25 per month by any means you want, or $15 if it's by a payroll deduction. So in order to meet the minimum, you'd just have to contribute $25/month. 2)You can't have a joint 529 account, but you can have multiple accounts (one for mom and one for dad) for the same child. – JuiceBox Apr 23 '15 at 18:56
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    @JuiceBox What the minimum amounts mean is that if you send in a check, it has to be at least in the amount of $25. If you contribute via payroll deductions (these monies will likely be sent via an electronic funds transfer), the 529 plan will accept as little as $15 per pay period. But if for some pay period, the owner is on unpaid sick leave or laid off, and there is no pay, the 529 plan is not going to send in a SWAT team to collect that money from the OP, or even send a letter saying "Hey, you missed a payment". – Dilip Sarwate Apr 24 '15 at 3:01

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