Can I Open 529 Plans While Receiving Disability Benefits?
Here’s a summary of the main problem and solutions discussed in the post:
- Main Problem: The user is inquiring about opening a 529 College Savings Plan for their child while receiving disability checks, and whether they can convert their workplace Fidelity account to a personal account if they quit their job.
- Solution for 529 Plan: The user is informed that a 529 plan allows tax-free growth and withdrawals for qualified education expenses, and they can invest in any of the Fidelity-managed plans regardless of state residency. They are encouraged to compare plans using a college savings plan comparison tool on Fidelity’s website.
- Resources Provided: Links to educational resources about 529 plans and college savings are shared for further assistance.
- Further Clarification Requested: The Fidelity representative asks for clarification regarding the user’s workplace account, specifically if they mean a 401(k) with Fidelity, to assist them better.
Here’s the full thread
Hi, I was wondering if I can open an account for 529 plan for my kid. while I am on disability check, can I still use to get a stock to build over time to get bit extra back? I also have my job fidelity can this be convert to personal not employee if I quit that job?
Thank you
Hi, @10110 Pleb. Thank you for visiting our Discord today. You have some great questions. I’m happy to help.
Starting with a 529 account, a 529 College Savings Plan can be a powerful tool when it comes to saving for higher education. With a 529, you do not pay any taxes on the earnings of the portfolio investments. Also, withdrawals are federal income tax-free when used for qualified education expenses. A resident of any state is eligible to invest in any of the five Fidelity-managed 529 College Savings Plans, although New Hampshire’s UNIQUE College Investing Plan is our national 529 plan. That said, before you start investing, it is important to consider whether you or your beneficiary’s home state offers its residents a plan with alternate state tax advantages or other state benefits.
You can start comparing some plans and benefits by accessing a college savings plan comparison tool through our website. To find it, visit the link provided below, scroll down to the “Where do you live?” heading, and then click on “consider your own state plan.” This tool covers all state plans, including ones not administered at Fidelity, so you can enter “California” and start research on the California plan from there, for example.
Fidelity 529 savings plans: https://www.fidelity.com/529-plans/overview
We also have some helpful resources on Fidelity.com to help you learn about 529 basics and college savings. Feel free to explore them below.
The ABCs of 529 Savings Plans: https://www.fidelity.com/learning-center/personal-finance/college-planning/abcs-of-college-savings-plans
Planning for college: https://www.fidelity.com/learning-center/life-events/prepare-for-college
Moving right along, can you clarify more about what you’re looking to accomplish with your workplace account? Are you referring to a 401(k) that you have with Fidelity?
Feel free to follow up with us so we can help you further. 🟢