I want to share with you the things I learned about Why a 529 College Savings Plan is a Great Choice…
and for our Children’s education savings plan; it’s our only choice from now on.
Learning how to manage money is a very important skill, a skill that not every child learns at school.
From a young age, all of my children have been taught about money management. They have earned money for great grades, doing extra tasks around the house, selling baked goods & lemonade stands, helping neighbors with chores, and then we have sat down together and separated that money into four piles – saving, giving, College, and spending. It has been a great way to make sure that they always remember to not only be giving with what they have, but to save for specific and important things in their lives. I trust that my Children will continue this method well into their adult years.
My 17 year old daughter will be a senior in High school next year and she is preparing for College. While her “savings” account may have more than most 17 year-olds because of her awesome money management skills, it still isn’t quite enough to pay for college.
My Husband and I have given a lot of thought into what type of account to open for her, as we naturally want an account that will benefit for more than just storing her money.
So after a lot of research, we decided that we are opening her and our 3 other children a 529 college savings plan!
Here are some of the most common questions we came across while researching and speaking to other Parents about College savings accounts:
What is a 529 College savings plan?
A 529 college savings plan is a type of investment account you can use for higher-education savings. 529 plans are sponsored by States and offer amazing tax savings benefits. As always, research to find out the rules for each State. Beneficiaries can attend college in any state, not just the state sponsoring the 529 plan.
Who can open a 529 College savings plan?
Anyone from a Parent to a friend can open a 529 account and as an account owner, you’ll pick investments, assign a beneficiary, and determine how the money is used.
What can the money in the 529 College savings plan be used for?
Money can be used to pay for anything that’s considered a qualified higher-education expense, including tuition, books, supplies, equipment, expenses for the purchase of certain computer equipment, software, computer-related services and certain room and board fees. It can be used for qualified higher-education expenses at any eligible educational institution, including: postsecondary trade, vocational schools and postgraduate programs. It’s not just a traditional two or four college degree that a 529 account covers.
It seems it was just a year ago that she was going to her first sleep-away camp, and her first Father/Daughter dance. This year she also played in her first Varsity Basketball Team, and had her Sweet 16…
but the realization of her going away to College became so real a year ago; during her ring ceremony. It was then, that I saw just how much my little Princess has grown up…
As we prepare to do College tours and are actively prepping for her going off to College, the amount of money that will be needed for all of the required items has quadrupled from what we initially thought.
This is why I am a big fan of the 529 Savings plan, not only can an account be created to help her for her College expenses, but everyone can deposit money towards her education expenses. This makes it so much easier for our Family and Friends to give her not only a perfect start to her new life, but also ease the troubles of not knowing what to get her for Graduation gifts, they can just simply make a deposit and it’s all taken care of.
Each 529 account has a unique Ugift code. You can easily email the code to friends and family, include it on the Graduation party invitations, or even share it via social media.
How much do I need to open a 529 College savings plan?
You can open an account with as little as $25!
How much can I invest in a 529 College savings plan?
529 account contribution limits are generally high – from $200,000 to $300,000 or more, depending on the State. For the Direct Plan, you can contribute up to $375,000 on behalf of one beneficiary. This amount includes all New York-sponsored 529 savings accounts held for the same beneficiary.