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Time does fly by with children; they grow up in the blink of an eye. That’s one of the many reasons the 529 college-savings industry introduced 529 Day during the month of graduation celebrations, whether it’s from preschool, middle school, or high school. 529 Day (May 29th) 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. By starting early, a college savings fund can grow with them. It’s easy, too, with Ohio’s 529 Plan, CollegeAdvantage.
And time is flying by to enter to Ohio’s 529 Plan 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! The deadline to enter is 11:59 p.m. EST this Sunday, June 11. Use the award to start a CollegeAdvantage Direct 529 Plan, add to a current 529 account to cover future post-secondary education or training costs!
What’s a 529 plan?
Let’s start at the beginning: A 529 plan is a college saving account, named after the part of the Internal Revenue Code that authorized their creation in 1996, Section 529. Legally know as a “qualified tuition plan”, these college savings accounts are sponsored by states, state agencies, or educational institutions. Ohio Tuition Trust Authority is the state agency that administers Ohio’s 529 Plan, CollegeAdvantage.
Tax advantages of 529 college savings plans
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.
For families with young children, 529 college savings plans are a great way to start early and save over time in a tax-advantaged way while taking advantage of the power of compound interest. Even with older children, it’s never too late to save in a 529 account to maximize the tax benefits.
National 529 Day and graduation season are great times 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.
CollegeAdvantage 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 saving 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.
Saving for college in Ohio’s 529 Plan does not mean that those funds can only be used in Ohio. 529 plans can be used nationwide (and even overseas) at any accredited two-year, four-year, graduate or professional, or any other post-secondary schools that accepts federal financial aid.
Consider opening an Ohio 529 Plan to save for future college costs. Remember, 529 accounts are an excellent alternative to student loan debt. 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. CollegeAdvantage is your plan, your way.
Posted on June 9, 2017