Investments For College Savings (529 Plan)

Saving for Education — the Cobblestone Way!
At Cobblestone Financial Services, we believe families should have a smart, tax-friendly way to save for education. Whether it’s college, K–12 tuition, or graduate school, a 529 Savings Plan is one of the most powerful tools available today.

Cobblestone Financial Services is proud to be one of Michigan’s leading financial services firms, and many of our clients use the Michigan 529 Advisor Plan (MAP) because of its strong benefits and our deep experience in helping make it work well.

Why a 529 Plan Makes Sense
Here’s what makes a 529 plan stand out — and what’s current as of 2025:

• Federal Tax Advantages
  Your contributions grow tax-deferred, and as long as you use the money for “qualified education expenses” (tuition, fees, books, housing, etc.), your withdrawals are tax-free.
  If money is withdrawn for non-education uses, the earnings portion becomes taxable and may face a 10% penalty.
• Michigan State Tax Benefits
  Michigan residents can deduct contributions to an eligible MAP or other Michigan 529 plan up to $5,000 per year (single filers) or $10,000 per year (joint filers).
  (Note: Contributions rolled over from another 529 plan typically do not qualify for the deduction.)
• High Lifetime Limits
  Most 529 plans allow lifetime contributions well above typical tuition costs. For Michigan’s plans, the aggregate limit is substantial — giving you room to save over many years.
• Open to Everyone
  Anyone — parents, grandparents, family, or friends — can open and contribute to a 529 account, no matter the income level.
• Flexible Use at Many Schools
  You can use 529 funds at any accredited college, university, or eligible post-secondary school in the U.S. and abroad. You can also use up to $10,000 per year for K–12 tuition.
• “Superfunding” / Accelerated Gifting
  In 2025, the annual federal gift tax exclusion is $19,000 per person.  Thanks to a special 529 rule, you can pre-fund up to five years’ worth of that exclusion in one year. That means you could contribute up to $95,000 in a single year (or $190,000 for married couples) toward a beneficiary’s 529 without triggering gift tax, spreading the gift evenly over five years for tax purposes.
• Transfer & Rollover Options
  If the original beneficiary doesn’t use all the money, you can change it to another qualifying family member without tax penalty. You can also roll over funds to an ABLE account (for individuals with disabilities) with no federal tax consequences.

How to Choose & Manage Your 529 Plan
While 529 plans are governed by federal law, each state implements them differently. Here are the most important things to watch for when selecting or managing a plan:

• State Tax Benefits – Make sure you understand how your state handles deductions or credits (especially true in Michigan, where the MAP offers a state deduction as noted above).
• Investment Options – Select a plan with a mix of portfolio choices (from conservative to growth). Many plans use age-based portfolios that become more conservative as the child nears college.
• Fees & Costs – Lower fees help your savings go further. Look out for administrative, fund management, and underlying expenses.
• Plan Reputation & Support – Choose a plan managed by a reputable institution with good customer service and ease of online access.
• Limit on Changes – Under federal rules, you may only change how existing contributions are invested twice per calendar year.

Future contributions, however, can go into any investment option offered by the plan.

Let’s Build the Right Education Plan for Your Family
Because there are many 529 plans to pick from and many rules to follow, working with an experienced advisor can make a big difference. That’s where we excel.

At Cobblestone Financial Services, we help you:

• Choose the best 529 strategy for your goals
• Maximize both federal and Michigan tax benefits
• Integrate education saving into your overall financial and estate plans
• Avoid common mistakes, like missing out on state deductions or mismanaging contributions

Reach out for a complimentary consultation with Clayton J. Winkler, CFP®, and let us help you set up a 529 plan that works hard for your family.

📞 Call now: (248) 216–1860
📧 Email: Clayton@CobblestoneFS.com

Start today, and give your family a powerful, tax-smart path toward education.