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Ohio’s 529 Plan knows how important it is to celebrate life’s milestones and May is filled with them: Mother’s Day, Graduation, Memorial Day, and 529 Day. 529 Day? What’s that? Held on May 29, 529 Day highlights the importance of saving now for your child’s future college education in a 529 college savings plan, whether the future is eighteen years away or three months from now.
What’s a 529 plan?
Established by the Internal Revenue Code 529 in 1996, 529 plans are the tax-advantaged way to save for college through tax- free earnings and tax-free withdrawals for 529-qualified higher education expenses. Additionally, Ohioans who save in CollegeAdvantage, Ohio’s 529 plan, can deduct 529 contributions up to $2,000 from their Ohio taxable income per beneficiary, per year. But they are allowed to contribute even more! Contributions over $2,000 per beneficiary, per year, may be carried forward to deduct from future tax years until all of your contributions are fully deducted. By planning ahead for future college costs, a 529 account can grow through the power of compound interest, regular contributions from not only the account owner but also family and friends, as well as all the tax benefits.
529 college savings giveaway
In honor of 529 Day and all the high school graduations, Ohio’s 529 Plan, CollegeAdvantage, wants to help account owners reach their college savings goals by giving away five $529 CollegeAdvantage College Savings Awards! Contest entries will be accepted at CollegeAdvantage.com starting May 22 through 11:59 p.m. EST on June 11, 2017.
Continuing 529 college savings education
Continuing the 529 Day celebration, Ohio’s 529 Plan is sponsoring a free, live one-hour Q&A webcast at 1 p.m. EST Wednesday, May 24. Tim Gorrell, executive director of Ohio Tuition Trust Authority, the state agency that administers CollegeAdvantage, along with college savings industry experts from Savingforcollege.com, Wall Street Journal, and Florida Prepaid College Board will share their insights regarding college savings and investments. Everyone who registers for the webcast will be able to submit their questions on 529 plans, financial aid, and other college planning topics. Additionally, the registrants will receive a free download of Savingforcollege.com's Family Guide to College Savings.
For families with young children, 529s are a great way to start early and save over time in a tax-advantaged way. National 529 Day is a great reason to get started now. Ohio’s 529 Plan, CollegeAdvantage, helps families across the nation save money for their children’s future college costs.
Want to know more about Ohio’s 529 plan? The CollegeAdvantage Direct Plan offers a variety of investment options — from ready-made, age-based or ready-made, risk-based portfolios; to investment vehicles to build a portfolio based on an individual’s investing preferences; and to FDIC-insured banking options. Ohio’s Direct 529 plan has partnered with leading investment managers Vanguard, Dimensional Fund Advisors, and Fifth Third Bank to provide these 529 plan investments. Similarly, CollegeAdvantage has partnered with BlackRock to offer an Advisor Plan.
The CollegeAdvantage website offers calculators and tools to build a 529 plan that best fits the account owner’s needs. The college savings planner can assess the projected college costs and provide an estimated monthly saving amount to be placed in a 529 plan in order to reach a saving goal. The cost of waiting tool can show approximately how much more money will need to be set aside if saving for college is postponed. Again, the earlier a 529 plan is started, the sooner the account can grow by taking advantage of compound interest. The tax benefit tool illustrates the long-term advantages of tax-free growth in a 529 plan compared to a taxable savings account. CollegeAdvantage also provides 529 account strategies by a beneficiary’s life stage: from baby to toddler, which is a fantastic time to start saving for future college expenses; kindergarten through elementary school, when disappearing expenses like day care costs can be shifted to fund the 529 account; middle school and high school, when college savings may need to be accelerated; and even college, where tax-free earnings, tax-free withdrawals, and the state tax deduction for Ohioans can still build up the 529 account.
Consider opening an Ohio 529 plan to save for future college costs. Remember, 529 accounts are an excellent alternative to student loan debt. CollegeAdvantage is your plan, your way. Enrollment in CollegeAdvantage is easy. Even if your children are older, it’s not too late to save what you can while also taking advantage of the great tax benefits.
Posted on May 9, 2017