Mother’s Day and Father’s Day may get more attention, but National Grandparents Day, observed on Sep. 10, has gained in popularity. If you’re a grandparent, you might expect to receive some nice cards, but if you want to make the day especially meaningful, you may want to consider giving some long-lasting financial gifts to your grandchildren.
What might come to mind first, of course, is helping your grandchildren pay for college. You can choose from several college savings vehicles, but you may be especially interested in a 529 savings plan. With a 529 plan, your earnings accumulate tax free, provided they are used for qualified higher education expenses, such as tuition, books, and room and board. (Keep in mind that 529 plan distributions not used for qualified expenses may be subject to federal and state income taxes and a 10% IRS penalty on the earnings.) You may be eligible for a state income tax incentive for contributing to a 529 plan. Check with your tax advisor regarding these incentives, as well as all tax-related issues pertaining to 529 plans.
One benefit of using a 529 plan is contribution limits are quite generous. Plus, a 529 plan is flexible: If your grandchild decides against college, you can transfer the plan to another beneficiary.
Generally, a 529 plan owned by a grandparent won’t be reported as an asset on the Free Application For Federal Student Aid (FAFSA), but withdrawals from the plan are treated as untaxed income to the beneficiary (i.e., your grandchild) — and that has a big impact on financial aid, a much bigger impact than if the plan was listed as a parental asset. Beginning with the 2017-2018 academic year, however, FAFSA now requires families to report income from two years before the school year starts, rather than income from the prior calendar year. Consequently, it might be beneficial, from a financial aid standpoint, for you, as a grandparent, to start paying for college expenses from a 529 plan in the year in which your grandchild becomes a junior. Contact a financial aid professional about the potential financial aid impact of any gifts you’re considering.
A 529 plan isn’t the only financial gift you could give to your grandchildren. You might also consider giving them shares of stock, possibly held in a custodial account, usually known as an UTMA or UGMA account. One possible drawback: You only control a custodial account until your grandchildren reach the age of majority, at which time they can use the money for whatever they want, whereas distributions from a 529 savings plan must be used for qualified higher education expenses.
Still, your grandchildren might be particularly interested in owning the stocks contained in the custodial account – most young people enjoy owning shares of companies that make familiar products. And to further interest your grandchildren in a lifetime of investing, you may want to show them how a particular stock you’ve owned for decades has grown over time. Naturally, you’ll also want to let them know that stocks can move up and down in the short term, and there are no guarantees of profits – but the long-term growth potential of stocks is still a compelling story.
You’d probably do whatever you could for your grandchildren – and with a smart financial gift, you can make a big difference in their lives.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Edward Jones, its financial advisors and employees cannot provide tax or legal advice.
Wrapping up a productive August District Work Period
Last week, I wrapped up a productive August District Work Period after hosting 82 meetings and events with constituents in all six of the counties I proudly represent. To date, I’ve been able to hold more than 360 meetings and events with constituents this year.
I attended roundtable discussions, met with faith leaders in Benton Harbor and community groups like the Kalamazoo Kiwanis Club and the Metropolitan Kalamazoo Branch of the NAACP, toured Vickers Engineering, the Vicksburg paper mill revitalization, and Saugatuck-Douglas History Museum, spoke at West Michigan University and local Farm Bureau events, and much more. I also conducted several one-on-one meetings with constituents to discuss a wide variety of policy issues such as healthcare, education, immigration, tax reform, 21st Century Cures, jobs, our economy, and more. Looking forward, we will continue to engage folks back home through a wide variety of platforms that produce meaningful conversations on important policy issues.
As we head into September, there is much work in front of us. A key task on our plate will be pursuing bipartisan, pro-growth tax reform to improve Michigan’s economy and create jobs. We’re looking forward to a busy and productive fall.
To learn more about this and other important legislative issues, please visit my website: upton.house.gov or call my offices in Kalamazoo (269-385-0039), St. Joseph/Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).
School resumes with record state funding on tap
As the school year begins, I am proud to report that schools in our community will see a record amount of state funding in the school aid budget. School districts across Michigan will receive, at minimum, an additional $60 per student under the 2017-18 budget, with schools at the lower end of the funding spectrum receiving increases of $120 per student.
As a teacher, I can attest to the fact that every dollar spent on education is stretched to its fullest to achieve as much as possible in the classroom. A majority of school districts in our community will receive a $120-per-student increase to help make up the funding gap that has existed between lower and higher funded school districts.
The budget for the coming fiscal year also includes an additional $25-per-pupil allocation for high school students on top of the base increase because of the extra costs associated with educating high school students. In addition, the funding formula includes an extra $25 for each at-risk student, helping to ensure that these students receive the additional support they may need. We are also investing more in career and technical education to give students more options after high school. As many of you know, there are a number of good-paying jobs available in the skilled trades, and they remain unfilled because we do not have enough people qualified for these jobs. Adding more skilled trades training opportunities for our students will make it possible for them to be better prepared to enter the workforce.
While we are making important and record breaking investments in educating Michigan’s students, I know our work is not done. I look forward to continuing to work with my colleagues in the Legislature and education leaders across Michigan to ensure our students receive the best education possible.
As always, please do not hesitate to contact my office with any questions or concerns. You can reach me toll free at 1-800-577-6212, via email at BethGriffin@house.mi.gov and on Facebook at www.facebook.com/RepBethGriffin.
Remember 9/11 and honor our brave first responders
While the tragedy of September 11, 2001 will forever be etched in our minds, it will also forever be a day that unites us as Americans.
It is a testament to our nation’s resolve that when our liberty is attacked like it was on 9/11, we come together to meet that challenge.
We will always remember the selfless United 93 passengers who acted to prevent further tragedy and the fearless first responders who ran into the twin towers to save lives — often at the cost of their own.
We will also always remember Chief Bailiff Joseph Zangaro and Bailiff Ron Kienzle, who were killed last year during the Berrien County Courthouse shooting.
My thoughts and prayers remain with them and their families.
I encourage all residents to join me in paying tribute to the brave first responders who showed extraordinary courage during 9/11 and to say thank you to the outstanding local heroes who are ready and willing to respond at a moment’s notice.
In addition to visiting area students, this year I will be participating in two ceremonies on Sept. 11: The third annual Berrien County Area Law Enforcement Torch Run in St. Joseph and the Remembrance of 9/11 Commemoration Service at the Buchanan Commons.
I will also be hosting a breakfast for all our first responders, our veterans and their families at the St. Joseph County Fair on Sept. 22 from 8 to 10 a.m.
To our firefighters, police officers and soldiers who protect our communities and nation every day, I commend you for your dedication and service and give you my heartfelt appreciation.
As always, I look forward to hearing your comments and feedback on the important issues facing Michigan. You can contact me at 517-373-6960.
National Emergency Preparedness Month
Many people are concerned about the possibility of a public health emergency such as a natural disaster, act of terrorism, or disease outbreak. You can take steps now to help you prepare for an emergency and cope if an emergency happens. To help you prepare, here are step-by-step actions you can take beforehand to protect yourself and your loved ones.
Step 1: Get a kit! Put together an emergency supply kit so that you will be prepared in case something happens. You should have emergency kits for your home, office, school, and vehicle. The basics are water (one gallon per person, per day), non-perishable food, first aid kit, flashlight, battery powered or hand crank radio, medications, sanitation supplies, cell phone chargers, and important family documents and contact information.
Step 2: Make a plan! Planning what to do before a disaster strikes provides the best protection for you and your family. Because you and your family may not be together when a disaster hits, it’s important to create a communication plan to help you and your loved ones connect and get help.
Step 3: Be informed! It’s important that you and your family know what to do before, during, and after an emergency. This means understanding what emergencies are likely in our area and specific ways to respond to each one. You should also understand the ways you can get information about potential threats, such as through text alerts, emergency sirens in your community, or other methods.