Back To Blog
Happy New Year! If one of your New Year Resolutions for 2021 is to start your college savings for your child’s higher education, Ohio’s 529 Plan, CollegeAdvantage, makes it simple to do.
Why Save In Ohio’s 529 Plan?
529 plans are specialized higher education or college savings accounts. 529 plans can be used at any federally accredited higher education institution — from two-year, four-year, graduate, trade or vocational schools, to an U.S. Labor Department registered apprenticeship. Another advantage is that 529 plans are accepted nationwide. If you save with Ohio’s 529 Plan, your child can use the Ohio 529 for any type of degree, at any accredited college, university, or other program in the country.
There are tax benefits for saving for college with Ohio’s 529 Plan, such as tax-free earnings and tax-free withdrawals for qualified higher education expenses. In addition, Ohio residents are eligible to deduct up to $4,000 of their 529 plan contributions per beneficiary, per year, from their state of Ohio taxable income. However, they can contribute even more! Contributions over $4,000 per beneficiary, per year, can be carried forward to deduct from future tax years, until all of their contributions are fully subtracted from their state taxable income.
Ohio’s CollegeAdvantage Direct 529 Savings Plan is recognized nationally as one of the nation’s best 529 plans.
Savingforcollege.com is a trusted, independent college-savings industry resource. In its most recent quarterly analysis of 529 plan investment performances, Ohio’s 529 Plan is listed at the top of two long-term investment performance charts. As of Nov. 20, 2020, CollegeAdvantage Direct 529 Plan ranks first in the nation for the best investment performance in two different categories: five year and ten year. Ohio’s Direct 529 Plan was ranked ninth nationally for the best performance in the three-year category.
Savingforcollege.com consistently recognizes Ohio’s Direct 529 Plan as one of the best plans in the nation for both Ohio residents and non-Ohio residents by giving the program a 5-Cap Rating. This designation is dependent on criteria that shows the college savings plan “offers outstanding flexibility, attractive investment, and additional economic benefits (such as generous state tax incentives) that for some people, at least, will provide a substantial boost to their savings. There are few, if any, weaknesses noted in the program.” Ohio’s Direct 529 Saving Plan has received this recognition multiple times for the plan’s attractiveness for Ohioans and across the nation.
Morningstar also regards Ohio’s Direct 529 Plan very highly. The program received a Silver rating for the tenth consecutive year. BlackRock CollegeAdvantage, Ohio’s Advisor 529 Plan, also retained its bronze ranking. This makes Ohio one of only four state programs that have both their Direct and Advisor 529 Plans ranked as medal class investment options by Morningstar. In addition, the Ohio Direct 529 Plan is one of only nine plans in the country to attain a positive ranking in all four of Morningstar’s pillars. The high ranking for both CollegeAdvantage 529 Plans highlights the strength of these two college savings plans as well as the industry’s regard for Ohio’s 529 Plan as one of the best in the nation.
How To Open An Ohio 529 Plan
Opening an Ohio 529 Plan is simple and easy to do. Start by visiting CollegeAdvantage.com and click on the tab that says, “New To CollegeAdvantage.” Select “What’s A 529,” and start reading the information on the next few pages to have a better understanding how a 529 plan works and why it’s the best choice in which to place your college savings. The last page is titled, “Before Opening An Account,” shares what information you’ll need to have on hand to open an account. After that, at the top on the web page, there’s a “Open An Account” hyperlink. Select it and you can start saving for your child’s future higher education!
You can get started saving for your child’s future with as little as $25.
Already Saving In Ohio 529?
Is your New Year’s Resolution is to increase your college savings? Here are some ideas to try.
- Review your 529 account. Are you putting enough funds aside to cover what you’d like of your child’s college costs? If you want to check the numbers, use our College Savings Planner to receive personalized saving information. You can vary your college savings goals to receive an estimated monthly amount needed to meet that savings objective. Please note that these examples are for illustrative purposes only.
- See if you need to adjust your savings strategy. As you child reaches a new life stage, you may want to update your strategy to reach your college savings goals.
- Check your account balance and track the investment performances. If you would like to make a substitution to your 529 savings portfolio, you can make an exchange of an asset from one investment option to another investment option, twice in a calendar year for the same beneficiary.
- Simplify your savings by setting up automatic deposits into your Ohio 529 account. You can set up contributions to match your paycheck deposits or create your own monthly schedule. Some employers offer payroll direct deposit, where a portion of your pay is directly deposited into your 529 account.
- Convert your disappearing expenses into regular 529 contributions. Disappearing expenses are those costs in your family’s budget for only a limited time span. For example, preschool is a large expense that disappear once a child starts kindergarten. Once your family no longer need this service, deposit those savings into your 529 plan. You won’t miss the money while you continue to support your child’s educational needs.
- Add your federal tax returns, pay raises, or bonuses to your 529 account. Saving $4,000 each year could cover as much as 60% of college at an Ohio public university, based on 18 years to save. Use the College Saving Planner at CollegeAdvantage.com to check the numbers yourself. And if you are an Ohio resident and are able to save $4,000 a year in your Ohio 529 Plan, then you can maximize your state income tax deduction from your Ohio taxable income.
- Invite other family members and friends to contribute to your child’s 529 plan with Ugift rather than giving toys or clothes. You can assure them that giving the gift of a higher education is much more meaningful and beneficial for your child’s long-term success.
- Shop with Upromise, a free loyalty program that offers its members cash back for their purchases from a wide variety of businesses. When you connect your debit and/or credit card to your Upromise account, you can start earning rewards with your everyday shopping. Then link your Upromise account to your CollegeAdvantage Direct 529 Plan account to roll over these rebates.
Every dollar contributed to a 529 will grow tax-free and can be withdrawn tax-free so keep moving forward to reach your college savings goal.
Visit Ohio’s 529 Plan online to start saving today for your child’s future education. An investment in a 529 plan is an investment in your child where every dollar saved today is a dollar that doesn’t have to be borrowed later. A 529 account can be used for whatever comes after high school. If you’d like to do more research, explore Ohio’s 529 Plan — The Plan That Can — at CollegeAdvantage.com.
Posted on December 29, 2020