Flossie Hall has one of the hardest jobs imaginable. She’s a mother of four and an active duty Navy spouse. She’s also the co-founder and Chief Operating Officer of the Association of Military Spouse Entrepreneurs (AMSE).
As a military wife, Hall has lived at 10 different addresses over the last 14 years. For much of that time, she’s also had to be a solo parent.
“Plan something and the military laughs,” Hall quips. “Business is the same way.”
After successfully navigating the financial challenges that come with new deployments, new homes, and newborns, Hall has dedicated herself to the business of helping other military families.
AMSE is an entrepreneurship program built by military spouses, exclusively for military spouses. It teaches men and women around the world how to start their own businesses. And military spouses are perfectly suited to be entrepreneurs because, as Hall puts it, “entrepreneurs have to curve and swerve every single day.”
Like many entrepreneurs, Hall was the first person in her family to graduate from high school – let alone college.
Today, she has a daughter in college whose education expenses weren’t budgeted for because Flossie and her husband were very young when they had her. As a result, they learned the value of proper financial planning.
The Halls’ three younger children will also likely attend college. This time around, Hall and her husband are prepared. They opened college savings accounts that will help pay for each child’s education.
They started 529 accounts for each of them. These special savings accounts have allowed the Halls to save over time in a tax-advantaged way for this specific financial planning objective. Money in the accounts grows tax free until withdrawn. When it is taken out to pay for specific education expenses, it also avoids taxation.
529 plans are offered by each of the states and many educational institutions. They don’t require account owners or beneficiaries to reside in the state offering the plan, but some plans do offer specific advantages to in-state residents.
Because there are no residency requirement, there is ample opportunity to shop around in order to find a plan that best suits the needs of the beneficiary.
Here are a few other things to keep in mind when comparing plans:
1) Every state offers at least one type of plan.
There are two types: Prepaid Tuition Plans or College Savings Plans.
2) Some plans allow others to contribute.
Most 529 plans allow people other than the account holder to make contributions to the beneficiary’s account.
3) The account holder owns and controls the account.
The account holder may withdraw money. The beneficiary may not.
4) Gift tax exclusion may apply.
529 plan contributions fall under annual and lifetime gift tax exclusions.
5) Consider a UGift® account.
UGift lets you invite family and friends to contribute to a child’s 529 account.
For more information and useful financial tools visit VCM.com/military.