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When school starts, so can college savings. For September is not only the back-to-school season, it’s also College Saving Month! The two go hand-in-hand, as a higher education is highly valued asset. Whether you’re watching your little one board the school bus for their first year of elementary school or you’re watching your future college graduate board the school bus for their last year of high school, it’s never too late or too early to save for their future post-high school training or educational costs.
Ohio’s 529 Plan, CollegeAdvantage, can help forward-thinking parents make college doable. We have information, tools, and calculators to share with parents as they develop their post-secondary school savings strategy.
Why save in Ohio’s 529 Plan
With Ohio’s 529 Plan, you can maximize your savings with 529 tax benefits, which include:
- tax-free earnings so all investment growth is yours to use;
- tax-free withdrawals for qualified higher education expenses, those costs — tuition, room and board, computers, mandatory fees — which are required for enrollment at a post-secondary educational institute;
- state income tax deduction for Ohioans for CollegeAdvantage 529 account. The current eligible amount for deduction is up to $4,000 per year, per 529 account beneficiary. However, with unlimited carry forward you can continue to deduct a large 529 plan contribution from your state income tax until all of it has been deducted. For instance, if you contribute $12,000 to your beneficiary’s account, you can deduct $4,000 from your state income tax for the next three years.
Ohio’s 529 Plan can be used many schools nationwide
Saving for college in Ohio’s 529 Plan does not mean your child can only attend Ohio schools. You can use your Ohio 529 Plan funds almost anywhere that you are comfortable sending your child and your money. 529 plans can be used at any federally accredited educational institution, which is a post-secondary school that accepts federally financial aid. If you want to confirm that the schools your child is interested in attending accepts federal aid, then do a search. If the institutions have a Federal School Code on the Free Application for Federal Student Aid (FAFSA). If the schools do, then you can use your 529 funds there, whether it’s two-year, four-year, graduate, vocational, trade, or any other post-secondary school.
No more child care costs?
Is your child is starting to go to school full-time? Child care costs are a huge disappearing expense, one of those costs that are part of your budget for a short period of time. Why not roll over those some of these 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 were already part of your budget, you won’t be missing the money if you shift them to build the 529 plan. With $100, you can build meaningful college savings no matter what kind of higher education your child pursues.
Tools to see your 529 savings add up
Ohio’s 529 Plan offers tools and calculators so you can create the 529 investment plan that’s right for your family. Start by answering the risk tolerance questionnaire to determine with which asset allocation mix you’d be most comfortable – conservative, moderate, or aggressive. Use the college savings planner to estimate the cost of your child’s college education, then set goals for how much you want to save toward the total expense. If you’ve started to save for college in a regular savings account, work with the tax benefit tool to see how tax-free growth in a 529 plan really adds up. And if you haven’t started to save yet, the cost of waiting tool can illustrate the advantages of saving early with the power of compound interest growing in the 529 account.
If you haven’t started saving for future higher education expenses, open your tax-advantaged Ohio’s 529 Plan today at CollegeAdvantage.com! For someday your child is going to college. Someday starts with Ohio’s 529 Plan, CollegeAdvantage.
Posted on August 30, 2019