Florida 529 College Savings Plan Review

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How Do Florida 529 Plans Work? 

Florida Prepaid plan is similar to Washington State's GET plan. You can pre-purchase college credits that your child can use to get a 2-year, 4-year, Graduate, Professional or Vocational education. It guarantees pre-paid education at any public college and university in Florida. The plan can also pay partially for an out-of-state school or a private college. 


Florida Savings plan is Similar to California's ScholarShare. Unlike the Florida Prepaid plan, you can decide how much to contribute. You can either invest a total of $418,000 in this plan or combine it with the Florida Prepaid plan to reach the amount.  


Both can be used to pay for books, tuition, and other education expenses.


Enrollment Requirement  

A U.S. citizen or resident can open an account and designate a beneficiary. For both plans, either the plan purchaser or the student must be a Florida resident. If either of them moves out of Florida, they can still contribute. 


Educational Programs Funded By Florida 529

  • K-12 School - Florida Savings plan can be used to pay the tuition for a public, private, or religious K-12 school. Florida Prepaid plan is better suited for a college education.
  • Apprenticeship - Florida Savings plan can be used to pay for an apprenticeship with in-class training.
  • Vocational School - Both plans can be used to attend a vocational school.
  • Graduate and Undergraduate College - Both plans can pay for qualified expenses including tuition, fees, housing, meal plans, books, supplies, computer technology, and equipment at any college or university in the U.S. as well as some international schools. 


Benefits of Florida 529

  • Flexibility - Parents can join either or both of the plans depending on their financial needs and their child's education plan. If the student decides not to go to college, both can be cashed out or transferred.
  • Gift Contributions - Family and friends can also contribute to the plan. A married couple can take advantage of five years' worth of federal tax-free gifts at one time and contribute $150,000. For single, divorced, and separated parents, the limit is $75,000 per person. 
  • Tax-Deferred - All earnings on the plans are tax-deferred. Florida Prepaid plan doesn't have any federal or state taxes unless the money is withdrawn.
  • Scholarship Withdrawal - If the student receives a scholarship, the money can be used for other educational expenses.
  • Federal Tax Exemption - All qualified distributions for up to $10,000 per student per year are exempt from federal income tax.
  • Supports in-state and out-of-state schools - You can use your savings for schools inside Arkansas or outside.
  • Rollover - You can also roll over from another state's plan.


How to Enroll 

  • You can enroll by going to the Florida Prepaid website.


Criticism for Florida 529 Plans

  • Since the Florida Savings plan mainly invests in the stock market, the plan beneficiary may not have enough funds due to the market fluctuations. 
  • Florida Prepaid covers only books and tuition. 
  • Some distributions may be taxable.
  • It gives an unfair advantage to the rich since they can save faster. 
  • The plans do not take Florida's rising cost of living into consideration.


Co-parents and Florida 529 Plans

Both plans can be a good option for divorced and separated parents residing in and out of the state. However, plans from other states, such as California, offer bigger savings than the Florida Savings plan.


Since co-parents have separate finances and only one person can start a Florida 529 plan, both parents can start one separately for the same child, and fund half of the balance.  This way, if the child decides not to attend college or they need to withdraw funds for some other reason, or assign a different beneficiary for their portion, they can do so easily.  Alternately, one parent can fund the entire plan and the other one can reimburse them for their half.  Another option is that they can start 529 plans in different states and fund half each.


Comparison With Other 529 Plans

Feature Arizona California Florida
Max Contribution  $519,000


$415,000 /

Full Tuition

Full In-state Tuition Yes Yes Yes
Full Out-of-state Tuition Yes Yes Savings Plan Only
State Tax Exemption Yes Yes No
Federal Tax Exemption Yes Yes  Yes
Primary Contributors Anyone Anyone Anyone
Student Loan Repayment Option Yes Yes Yes
Plan Review Link Link  


What is a 529 Plan?


529 Plans By State

1. Alaska 529 Plan

2. Alabama 529 Plan

3. Arizona 529 Plan

4. Arkansas 529 Plan

5. California 529 Plan

6. Colorado 529 Plan

7. Connecticut 529 Plan

8. Delaware 529 Plan

9. Florida 529 Plan

10. Georgia 529 Plan

11. Hawaii 529 Plan

12. Idaho 529 Plan

13. Illinois 529 Plan

14. Indiana 529 Plan

15. Iowa 529 Plan

16. Kansas 529 Plan

17. Kentucky 529 Plan

18. Louisiana 529 Plan

19. Maine 529 Plan

20. Maryland 529 Plan

21. Massachusetts 529 Plan

22. Michigan 529 Plan

23. Minnesota 529 Plan

24. Mississippi 529 Plan

25. Missouri 529 Plan

26. Montana 529 Plan

27. Nebraska 529 Plan

28. Nevada 529 Plan

29. New Hampshire 529 Plan

30. New Jersey 529 Plan

31. New Mexico 529 Plan

32. New York 529 Plan

33. North Carolina 529 Plan

34. North Dakota 529 Plan

35. Ohio 529 Plan

36. Oklahoma 529 Plan

37. Oregon 529 Plan

38. Pennsylvania 529 Plan

39. Rhode Island 529 Plan

40. South Carolina 529 Plan

41. South Dakota 529 Plan

42. Tennessee 529 Plan

43. Texas 529 Plan

44. Utah 529 Plan

45. Vermont 529 Plan

46. Virginia 529 Plan

47. Washington 529 Plan

48. West Virginia 529 Plan

49. Wisconsin 529 Plan

50. Wyoming 529 Plan

51. DC 529 Plan

Warning:  This post is neither financial, health, legal, or personal advice nor a substitute for the advice offered by a professional. These are serious matters, and the help of a professional is recommended as it can impact your future.

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