Along with our age-based investment options, Ohio’s 529 Plan, CollegeAdvantage, offers age-based savings strategies for parents who want to select their own 529 investment options. No matter how old your child is, Ohio’s 529 Plan has guidance on what to do at this current stage of their lives. For it’s never too early and never too late to save for their higher education. In this second article in a six-part series, Ohio’s 529 Plan shares recommendations on what steps to take to build a 529 college savings account from when your child first heads off to elementary school.
Kindergarten – Elementary
Kindergarten comes fast; suddenly your just-learning-how-to-crawl baby is walking off the school bus after their first day of kindergarten. If you haven’t had a chance to start an Ohio 529 Plan, now is the perfect time to open one for your child’s higher education.
It’s also a good time to figure out your saving goals. If you aren’t sure where to start, Ohio’s 529 Plan offers tools and calculators to shape your 529 plan. Crunch the numbers with the College Savings Estimator to calculate estimated college costs and determine the monthly amount to contribute to reach your savings goals. If you’re wondering when you should start saving for their higher education, use the Cost Of Delay Saving Tool to see what a difference starting early can do for building up the 529 plan. The Tax Benefit Tool shows how a tax-advantaged 529 plan can grow when compared to a taxable savings account. Don’t forget, the sooner you start the 529 account, the sooner the power of compound interest and tax-free earnings can go to work growing the account.
Remember all those diapers from when your child was a baby? Well that’s a disappearing expense, one of those costs that are part of your budget for a short period of time. A huge disappearing expense is preschool or day-care costs. As your child is starting to go to school full-time, why not roll over those expenses to a regular 529 plan contribution? This way, those dollars you’ve already prioritized for pre-K education will now support your child’s higher education. And as those bills are part of your budget, you won’t be missing the money if you shift them to build the 529 plan.
When your child graduates from preschool and kindergarten, that’s also a milestone that your family and friends will want to celebrate. If they ask what gifts your child would want for these events or their birthdays, bring up the gift of college and offer a Ugift code you’ve already set up so they can make a contribution to support their future education. They can use the Ugift code to contribute to the account at any time and as many times as they like. If the gift giver would prefer to write a check, make sure it’s payable to Ohio Tuition Trust Authority (the state agency which administers CollegeAdvantage) and includes the 11-digit account number.
As your family grows and grows older, keep shopping with Upromise to rollover over those cash backs and rebates to the 529 college savings plan. Upromise is a free loyalty program that offers members cash back and rebates for purchases made at a wide variety of businesses. First, you connect your debit and/or credit card to your Upromise account to earn rewards with your everyday shopping. Then link your Upromise account to your CollegeAdvantage Direct 529 Plan account to roll over these rebates. Read how this CollegeAdvantage family used Upromise to add to their 529 savings.
Even if you opted for an age-based portfolio to set-it-and-forget-it, don’t forget to keep adding to their college savings account. As your child heads out to fun athletic or educational activities, you can set up automatic contributions so there’s one less item on your to-do list. It’s simple to do and you can set it and forget it to concentrate on more important items – like cheering them on at the soccer game.
Someday, your child will be going to college so start saving with Ohio’s tax-free 529 plan. These are some recommendations to consider for your elementary school student and corresponding steps to take with your 529 college savings plan.