What is a 529 Plan?

What is a 529 Plan?

• A tax-advantaged account where you can put after-tax money into and it grows tax-free. The money can then be withdrawn tax-free for higher education qualified expenses.
• Higher education is undergrad college and graduate school. It is NOT high school.
• Examples of higher education qualified expenses are tuition, room and board ON campus, COMPARABLE off-campus housing, REQUIRED books and supplies, computer, and internet access.
• Examples of *NON* higher education qualified expenses are clubs fees/dues, fraternity/sorority fees/dues, etc.
• Since the money you put in (your contributions) is AFTER-TAX you can withdraw your contributions (principal) at any time without PENALTY. You will owe taxes on a pro-rata basis however. Additionally, if you took a state tax deduction on your contributions going in then naturally that state may want that deduction back.
• If you withdraw the money for a NON higher education qualified expense you will pay a 10% penalty PLUS federal/state taxes on EARNINGS (the growth on your contributions).

The power of a legacy...

If I had known this, there's a good chance I wouldn't have become a comedian. Until I lucked into a comedy club at age 20, just on a whim, I assumed I would pick up things for White people for the rest of my life. If I had known this, it would have taken away the inevitability that I was gonna be nothing.

- Chris Rock, upon learning that his great, great, grandfather fought in the Civil War and was elected to the South Carolina Legislature.

The quote above resonates deeply. More importantly it makes me wonder if my father knew something about his ancestry that instilled him with the confidence that he could achieve anything. He in turn, tried his very best to instill that confidence in me. To this very day, almost 14 years after his passing, I can only wonder if his confidence was based on something real or fabricated.

Strangely enough though, I have found peace in simply knowing that I exist today because all my direct ancestors going back to the beginning of time survived long enough to reproduce and actually did so. I was born a winner, I was born a winner.