The PA 529 Plan is Considered the Best
Each state has its own variations of the 529 plan. Pennsylvania’s College Savings Program is thought of as the best of all the 529 plans. So what is it that makes the PA 529 plan better than other state 529 plans? Here is a list of the benefits of the Pennsylvania 529 plan:
- Pennsylvania taxpayers can deduct 529 contributions for up to $13,000 per beneficiary annually. Married couples can deduct double that – up to $26,000 per beneficiary per year. Of course, this assumes that each spouse has a taxable income of at least $13,000.
- A person can contribute up to $65,000 in a single year – double that for jointly-filing married couples – per beneficiary. This contribution is viewed as gift spread over five years.
- 529 funds are exempt from Pennsylvania inheritance tax.
- The Pennsylvania 529 Guaranteed Savings Plan (GSP) allows you to save in a way that your investment is guaranteed to match the rate of college tuition inflation,
- You can have a flexible contribution plan so that you can invest a mere $25 at a time.
- Each beneficiary can accumulate up to $368,600 in his or her Pennsylvania College Savings Program accounts.
- There are no income restrictions. So regardless of how much or how little you make, you can open a PA 529 plan.
- There is no enrollment fee or annual maintenance fee.
- You do not have to live in Pennsylvania to contribute to a PA 529 plan.
- You can participate in the PA 529 plan without a broker and buy the plan yourself.
There are two types of 529 plans — The Pennsylvania 529 Guaranteed Savings Plan and the Pennsylvania 529 Investment Plan. The first one keeps up with tuition inflation and the second one offers 13 investment options.