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529 Tips

Tips To Spring Clean Your Ohio 529 Plan

For 2021, spring finally sprung on March 20! As you shake off the winter blahs, your thoughts may turn to spring cleaning. When you start your improvement projects in and around your house, be sure to take some time to review your children’s accounts with Ohio’s 529 Plan, CollegeAdvantage. Some college savings spring cleaning you can do in 2021 can include updating your two-factor authentication, saving strategies, investment options, and going green to keep more clutter from your home.

Security tips

It’s critical that you take steps to protect your information on the Internet. In 2017, 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 a SMS text to receive your PIN (Personal Identification Number) or an automated outbound call.

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.

Keep your house clean by going paperless

As you are clearing out papers in your home, you can set yourself up for future success by signing up for e-notification with Ohio’s 529 Plan.

E-notification is the fastest and most efficient way to receive communications from Ohio’s 529 Plan. These e-communications include your quarterly statements, offering statements updates, transactions and profile confirmations, and tax forms.

To switch to e-notification for Ohio 529 Plan communications, first log in to your account. To change your delivery preferences, go to your Profile and Documents section, then to Delivery Preference. Once there, select Edit Delivery Preferences and choose email.

Another way to go green – by making online withdrawals. As the U.S. Postal Service is still experiencing delays in the delivery of all materials, this could affect your payments for your child’s qualified higher education expenses when you opt to mail the tax-free 529 withdrawal.

The fastest method to pay a higher education institution is to make an online withdrawal request online. By doing so, you can have that money deposited directly into your bank account and then pay the school directly through their online payment portal or you can write the check to cover your child’s qualified college costs. Please keep in mind the bank must be on file with CollegeAdvantage for at least 15 days before this is an available option.

Rethink your refund

If you receive a tax refund in 2021, 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. 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.

For 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.

For more than 30 years, Ohio’s 529 Plan, CollegeAdvantage, has been helping families across the nation save for their children’s higher education. Ohio’s 529 Plan covers qualified costs at any four-year college or university, two-year community college, trade or vocational school, apprenticeship approved by the U.S. Labor Department, or certificate program nationwide that accepts federal financial aid. If you’d like to learn more about the tax-advantaged way to save for college, explore Ohio’s 529 Plan — The Plan That Can.

This article was originally posted in March 2020 and has been updated to reflect new information for 2021.

Posted on March 29, 2021

Ohio Tuition Trust Authority

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