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It’s finally springtime. As the outside world warms up and you’re likely spending more time at home, your thoughts may turn to spring cleaning. As you start improvement projects around and outside your house, be sure to take time to review your children’s 529 account. Ohio’s 529 Plan, CollegeAdvantage, can help.
It’s critical that you take steps to protect your information out on the Internet. Ohio’s 529 Plan implemented the cybersecurity measure of two-factor authentication to protect your valuable college savings account information from phishing attacks and identity theft. If it’s been a while since you’ve logged into your CollegeAdvantage Direct 529 Plan account, please make sure that your phone number is up-to-date. Your phone number is necessary to set up two-factor authentication, as you will receive either an automated outbound call or a SMS text to receive your PIN (Personal Identification Number).
If your phone number is current, then you can just log into your account to initiate the two-factor authentication process.
If not, please complete the Account Information Change Form and send this to the address within the document so we can update your information.
To log into your account, create a strong and complex password that contains at least eight characters, including letters, capitalized letter, numbers, and special characters, like punctuation marks and symbols. Additionally, you should clear the cache and cookies on your computer, mobile, or handheld device regularly.
Rethink Your Refund
If you receive a tax refund in 2020, saving it in your Ohio 529 account could be your entire college savings plan. Use our College Savings Planner to see how much you can save by contributing your federal tax return annually to your tax-free 529 plan.
For example, if you contribute the average federal tax return for Ohioans of $2,539 to Ohio’s 529 Plan for the next 17 years, you can save up to 79 percent of in-state college tuition and fees. Watch this video to see the numbers!
More than one child?
If you opened a college savings plan when your first child was born but haven’t yet for your other bundles of joy, consider opening a 529 plan for each of them. Individual 529 accounts can maximize the tax benefits of saving for college in a 529 plan. These advantages include tax-free contributions and earnings, which means all investment is growth is yours to use, and tax-free withdrawals when used to pay qualified higher education expenses.
Additionally, Ohio residents can deduct the Ohio’s 529 Plan contributions from their Ohio taxable income, up to $4,000 per year, per beneficiary, with unlimited carry forward. If you are an Ohioan with three Ohio 529 plans for your three children, you can maximize this tax benefit up to $12,000 per year. Because of the unlimited carry forward for the state income tax deduction, it means that $4,000 per year is not a contribution cap. If you have one 529 account and you’ve contributed $12,000, you will subtract $4,000 per year, per beneficiary, from your Ohio taxable income until all the 529 contributions have been deducted.
Age-based saving strategies
Has it been a while since you’ve opened your CollegeAdvantage account? It might be time to check out these age-based savings strategies, especially if you’re not in a ready-made age-based portfolio. With a ready-made age-based investment option, the equity in a portfolio will automatically decrease as your child grows older; this reduces risk in the portfolio the closer the time comes to use the account to cover higher education costs.
Foe example, if you still have a baby or toddler, you’ve done a great job by already starting to save for their future higher education. When loved ones ask what gifts you’d like for your child, ask for the gift of a college education and share how they can add to your child’s account through Ugift.
Tools and calculators
While you’re reviewing your Ohio 529, you can check to see if you’re on track with your college savings goals with our tools and calculators. With the college savings planner, you can receive an estimated monthly savings amount needed to reach your savings objectives. Change the planned contribution amount in this tool to see how setting aside a little more money can really add up. The cost of waiting tool can ascertain how much more you may need to save to reach your college savings goals if you don’t start soon. Lastly, your asset allocation strategy is one of the most important decisions you’ll make. If you aren’t sure what level of risk you’re willing to take in your investment strategy, the risk tolerance questionnaire can determine your comfort level.
While in the midst of spring cleaning, be sure to include your Ohio’s 529 Plan. Whether it’s performing account maintenance, starting automatic contributions to your 529 account, or updating account information, now’s great time to refocus on your college savings goals and your 529 account. For someday your child is going to college. Someday starts with CollegeAdvantage.com.
Posted on March 25, 2020