By Regina Carmon, Sr. Director, Tuition Financing Relationship Manager
January 14, 2025
Dr. Martin Luther King Jr. contributed countless lessons about life, purpose, and service. Although rooted in the civil rights movement, his wisdom also offers guidance for how we plan for the future of those we love. As we consider decisions about supporting our families and building up our communities, let Dr. King’s words inspire us to prioritize meaningful actions.
“Life’s most persistent and urgent question is, ‘What are you doing for others?’” Dr. King asked this in 1957 during a speech in Montgomery, Alabama, during the civil rights movement. It remains just as relevant today. For parents, grandparents, aunts, uncles, and mentors, this question resonates deeply. It’s not just about the day-to-day ways we care for our loved ones, but also about the long-term opportunities we create for them.
One of the most impactful answers to this question can be investing in their education. A 529 savings plan is one of the best tools to accomplish this in a tax-advantaged way. Whether you’re saving for college, vocational training, certain apprenticeship programs, or even K-12 tuition, a 529 savings plan helps you prepare for the rising costs of education while easing the financial burden on future generations.
Sounds simple enough, yet few Americans are taking advantage of the opportunity. The idea of saving for a child’s education can feel overwhelming, especially with the rising cost of college and other financial responsibilities competing for our attention. That’s where another quote from Dr. King becomes relevant:
“Be a bush if you can’t be a tree. If you can’t be a highway, just be a trail. If you can’t be a sun, be a star. For it isn’t by size that you win or fail. Be the best of whatever you are.”
A decade later, in a 1967 speech at Glenville High School, Dr. King reminded us that it’s not the size of our contribution that matters but the effort and intention behind it. You don’t need to fully fund a 529 account overnight or aim to cover 100% of future education costs. Thanks to the power of compounding, every contribution, no matter how small, can grow over time. Start saving early; a little each month can make a significant difference years later.
When you open a 529 savings plan, you’re answering the call to do something meaningful for others. You’re giving your child or loved one the gift of opportunity, reducing the financial stress of pursuing their dreams, and setting an example of generational generosity.
Why Choose a 529 Plan?
- Tax Benefits: Contributions grow federally tax-deferred, and withdrawals for qualified educational expenses are tax-free. Many states offer additional tax deductions or credits for contributions.
- Flexibility: Funds can be used for a variety of educational expenses, including tuition, books, room and board, certain student loan repayments, and unused funds may be eligible for a rollover to a Roth IRA (subject to rollover rules and limits).
- Control: As the account owner, you maintain control over the funds earmarked for an intended purpose.
- Accessibility: Even if you can’t contribute large amounts, consistent small contributions can still yield meaningful results over time. The best part is your village—family and friends—can contribute to your account.
Living Out Legacy
As we reflect on Dr. Martin Luther King Jr.’s words of wisdom, let them inspire us to take meaningful action for the people we care about most. A 529 plan is more than a financial strategy—it’s a way to answer the call to serve and invest in the future.
When you think about the question, “What are you doing for others?” consider how even the smallest steps toward educational savings can be transformative. When you doubt whether your contributions are enough, remember Dr. King’s advice: “Be the best of whatever you are.” By doing your best—whatever that looks like for you—you’re planting generational seeds of opportunity, growth, and success.
Be inspired to act today. Consider opening a 529 plan, make consistent contributions, and start building a legacy that will empower the next generation to live their dreams, pursue their passions, and one day inspire them to do similar for another.
About the Author
Regina Carmon has worked within the 529 industry since 2009 and joined TIAA as Sr. Director, Tuition Financing Relationship Manager in 2022. Regina is the proud parent of her daughter Raye Nicole; and pets Bentley and Jet. She enjoys collaborating on ways to bring financial literacy to the underserved, volunteering monthly to distribute food, serving on the media ministry at church, experiencing cuisines from travels near and far, and spending time with family and friends.
Please read the Plan Description on www.tiaa.org/529 carefully prior to investing, for details on its investment objectives, risks, charges, and expenses, and whether your home state offers tax or other benefits such as financial aid, scholarship funds, or protection from creditors for investing in its own 529 plan. More information about municipal fund securities is available in the issuer’s Plan Description. Investments in the plan are neither insured nor guaranteed and there is the risk of investment loss. Consult your legal or tax professional for tax advice. TIAA-CREF Tuition Financing, Inc. (TFI) is the Plan Manager for several state 529 plans, and TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, is the distributor and underwriter for those plans. 4132995-0127
By Devon Copeland, Senior Communications Associate, Invest529
January 7, 2025
As we enter 2025, many people are examining their spending habits more closely. Beyond balancing budgets, there’s a growing focus on making financial decisions that reflect their values and support what matters most—family, education, and a secure future.
For parents, grandparents, and guardians, investing in education is one of the most meaningful ways to align finances with purpose. Whether you’re preparing for a child’s college tuition, a trade school certification, or even your own professional development, a 529 account offers a flexible, tax-advantaged way to save for education expenses.
Here’s how a 529 account can help you meet your 2025 financial goals while staying true to your values:
1. Put Your Money Where Your Priorities Are
529 accounts are more than just savings tools—they’re a commitment to education and lifelong learning. In 2025, a 529 account can be a purposeful way to invest in the future you want to see for your family.
Qualified expenses include tuition, fees, room and board, textbooks (if required by the syllabus), and even student loan repayment in some cases. By contributing to a 529 account, you’re making a choice to empower opportunities and break down financial barriers to education.
2. Stay Flexible with Education Plans
Education looks different for everyone, and a 529 account recognizes that. Funds can be used for a variety of post-high school pathways, including trade schools, community colleges, four-year universities, and registered apprenticeships.
Not sure what the future holds? No problem. 529 accounts allow for beneficiary changes, meaning if one child doesn’t use the funds, you can transfer them to another family member—or even to yourself if you’re planning a career pivot or learning opportunity.
3. Let Your Money Work Smarter for You
Saving in a 529 account offers tax advantages that let your contributions grow more efficiently. Earnings are tax-free when used for qualified education expenses, and some states, like Virginia, offer state income tax deductions for contributions.
Think of it this way: Every dollar saved in a 529 is a dollar you won’t have to borrow with interest later. This not only protects your budget but also supports financial independence for the next generation.
4. Start Small, Dream Big
One of the best things about a 529 account is its accessibility. You don’t need to make large contributions to make a significant impact. Small, consistent contributions—whether monthly or annually—can add up significantly over time.
If you’re looking for ways to engage friends and family in your savings journey, consider encouraging them to contribute to your 529 account instead of giving traditional gifts. Many plans allow you to send gift links for easy contributions.
5. Take Advantage of the Present
In 2025, don’t wait to start saving because you feel like you’re behind. Whether your child is in diapers, middle school, or nearing graduation, it’s never too late to make progress. Start with what you can today—every bit counts.
By prioritizing a 529 account, you’re not just saving money but creating a legacy of learning, empowerment, and financial stability.
Make 2025 a Year of Intentional Choices
The new year offers individuals and families an opportunity to focus on financial decisions that align with what matters most. Opening or contributing to a 529 account isn’t just about dollars and cents; it’s about investing in opportunities, dreams, and the values you hold dear.
About the Author
Devon Copeland is the senior communications associate with Invest529. Invest529 makes education more accessible and affordable for families and individuals. The program is administered by Commonwealth Savers Plan, which oversees education 529 saving programs with more than $110.7 billion assets under management and 3.1 million accounts as of November 30, 2024, making it the largest 529 plan in the nation. For more information on Invest529’s education savings options, visit Virginia529.com or call 1-888-567-0540 to obtain program materials.
By Michelle Winner, Director of Marketing, Maryland 529
It seems like the holidays and family traditions go hand in hand. For the past 10 years, my husband and I have spent Christmas Eve watching Elf with our two daughters, and we enjoy a family bowling match with my father the day after Christmas. I’m not sure how these activities evolved into a yearly tradition, but they are always filled with so much joy and laughter that I can’t imagine spending either day doing anything else.
Another tradition that may not sound as fun as watching a movie or playing a game is discussing our financial goals for the upcoming new year. Can we afford to take a family vacation? Are we anticipating any major expenses – replacing our roof, purchasing a new car, etc.? What is the health of our emergency fund should there be an unexpected job loss? While most of this discussion is between my husband and me, one thing we make sure we do with our daughters is to review their 529 plan account balances. We started including them in this conversation when they were in middle school and started talking about their “dream” colleges. We explained how we were saving for their future education with a 529 plan, but if the cost of the college they wanted to attend exceeded the balance in their 529 plan, they would have to take out a loan. While it was a somewhat simplistic explanation at the time, it was enough to help them understand the basic concept that you can’t spend more than what you have without consequences. When it came time for them to start applying to colleges, knowing how much money they had in their accounts helped them decide which colleges they could attend without incurring student loan debt, a burden they now see many of their friends shouldering.
So, as you spend the holidays engaging in your favorite family traditions, consider adding one more tradition: including your children in their education savings journey. Even if high school graduation may be years ahead for your children, it’s never too early to start teaching them the basics of fiscal responsibility. Not sure where to begin? Here are some resources to help get you started:
New to college savings? This article
includes expert insights from a T. Rowe Price thought leadership director that can help you build your college savings plan strategy.
Money Confident Kids is a great resource for helping middle school and high school students learn and understand the basics of saving, spending, and investing.
The Federal Deposit Insurance Commission (FDIC), the Consumer Financial Protection Bureau (CFPB), and the National Credit Union Administration (NCUA) provide different types of free financial education materials for pre-kindergarten through college students.
Wishing you a happy and fiscally healthy New Year!
About the author:
Michelle Winner is the Director of Marketing for Maryland 529, a division of the Maryland State Treasurer’s Office that oversees the Maryland College Investment Plan, the Maryland Prepaid College Trust, and Maryland ABLE. Michelle also serves as Co-Chair of the Communications Committee for the College Savings Plans Network.
By: South Carolina State Treasurer Curtis Loftis, Administrator of Future Scholar College Savings Plan
December 17, 2024
It goes fast, doesn’t it? Just when you’re comfortable with the back-to-school routine, here come the holidays. Take a deep breath and enjoy the season – 2024 version.
But once the decorations are packed up and the wrapping paper is in the trash, I hope you’ll set aside a few moments to get ready for a very different kind of season: tax time. You’ll want to be sure to close out the year strong to be in the best situation when tax day rolls around.
Timing is everything
Taxes are usually due on April 15th of each year – unless the day falls on a weekend. However, this tax season will be different for some states. Because of the devastation of Hurricane Helene, all of Alabama, Georgia, North Carolina, and my state of South Carolina will have their taxes due on May 1, 2025. In addition, parts of Florida, Tennessee, and Virginia will have also have their taxes due on May 1, 2025.
Get motivated
Begin by estimating your federal income tax bill for the year. You can find your tax bracket and standard deduction information on the IRS website. Your federal tax estimate will motivate you to consider using a win-win strategy that can lower your state tax bill.
Save for the win
One of the best moves you can make to subtract from your state tax bill actually involves adding to your own education savings. By contributing to your 529 college savings account, you could reap the benefits of state tax incentives now. More than thirty states and the District of Columbia offer tax incentives to families who save with a 529 plan. These states allow families to deduct at least some percentage of their contributions from their taxable income. Four more states offer tax credits a family can use to offset state income taxes.
The tax savings can be significant. South Carolina allows residents to deduct 100% of the amount they contribute to Future Scholar, South Carolina’s 529 plan, on their SC state income tax return. It’s an excellent benefit for the citizens of my state. Review your plan to find out if you can benefit from tax savings, too.
Deadlines matter
Of course, there’s no deadline to contribute to your 529 account. However, if you want your contributions to qualify for tax savings for your 2024 tax returns, you’ll need to know your state’s deadline. Most states will have a deadline of December 31, 2024, to claim a deduction on your 2024 state income tax returns, but a few states, like South Carolina, allow contributions to be made until taxes are due. Be sure to consult your plan to determine the deadline for contributing funds you can claim on your 2024 return.
Be a front loader
The IRS has a special gifting feature that will allow a larger amount of money to be given at one time. Called frontloading or super funding, this feature gives your funds the ability to compound for a longer time than they would if you were making regular annual contributions.
Through frontloading, your 529 plan may be funded up to the 2024 annual exclusion of $18,000 for a single person or $36,000 for a married couple. When you front-load, you contribute a one-time gift of the amount that is usually allowed over five years – without paying gift taxes.
With frontloading, a single person can contribute $90,000 per child in one year and enjoy the benefits of compounding interest on a larger amount. The contribution will be removed from the contributor’s taxable estate and treated by the IRS as if $18,000 were given per year for five years. Of course, any contributions made beyond this amount over the five years could be subject to federal taxes. A financial professional can help you decide if front-loading could work for your family and your financial situation.
Earmark your refund
Expecting a tax refund in 2025? Decide today to use it to invest in your child’s future education. Earmark it for a lump sum contribution to boost your 529 college savings. That way, you know you’re using it for something meaningful.
Appreciate your genius
While you’re enjoying the last few days of 2024, take a minute to appreciate how wise your decision to save with a 529 account really is. You’re saving for college tax-free, and when the time comes to use those 529 funds to pay for qualified education expenses like tuition, books, computers, and room and board, you’ll be withdrawing your funds tax-free, too. Congratulations – genius move.
About the author:
Curtis Loftis is the State Treasurer of South Carolina. He also serves as the administrator of South Carolina’s Future Scholar 529 College Savings Plan. Visit treasurer.sc.gov or futurescholar.com for more information on ways to save through a 529 plan.
Thanksgiving break is coming up, giving college students a chance to recharge. Whether they’re heading home, staying on campus, or traveling, it’s also a great time to get a few things done to benefit them in the long run.
5 things you can encourage your college student to do over Thanksgiving break:
- Catch Up on Sleep and Self-Care
Your student needs rest after weeks of late-night study sessions and juggling responsibilities. Encourage them to use the break to get plenty of sleep, take walks, eat well, and focus on self-care. This downtime will help them recharge and finish the semester strong.
- Reconnect with Family and Friends
Thanksgiving is the perfect time for your student to reconnect with loved ones. Whether sharing a meal with family or catching up with old friends, encourage them to take advantage of this break to strengthen those meaningful relationships. It’s a great reminder of the support they have.
- Get Ready for Finals
With final exams approaching, this break is a good time for your student to get organized. Suggest they review syllabi, create a study plan, and gather their notes. A little prep now will help reduce stress when finals week arrives, giving them more confidence to perform their best.
- Review Their Finances
Thanksgiving is a good time for your student to take stock of their finances. Whether managing spending, reviewing financial aid, or planning for upcoming expenses, this is an opportunity to develop better financial habits and set up a budget for the rest of the school year.
- Reflect and Set Goals for Next Semester
Encourage your student to use the break to reflect on how the semester has gone so far. What went well, and what areas could use improvement? Setting goals for the next semester—whether boosting grades, joining new activities, or creating better routines—can help them start the spring with a clear focus.
Thanksgiving break offers a valuable chance for your college student to rest, reconnect, and get organized. While they enjoy their time at home, encouraging a balance of relaxation and productivity will help them return to campus ready to tackle the rest of the semester.
About the author:
Eric Bennett is the editor for College Countdown, a website maintained by ScholarShare 529 for families with college-bound kids. Eric has over three decades of experience in higher education managing recruitment and marketing, financial aid, and student development at three universities from Georgia to California to New York City.
By Jeremy Rogers, Director, New York 529 College Savings Program
November 12, 2024
Growing up there was never any real doubt in my mind that I wanted to serve in the military after high school. While college was always something that I figured could be an option down the road, it never really felt like a path I would go to right away. While this was mostly due to my desire to serve our country, the concern around costs to attend college was a factor. Growing up in rural Illinois, the costs of higher education always felt like too much of a hurdle for my family.
Looking back there was only one time that I really took a step back to re-think my decision to enlist in the Navy. That was when my father offered to sell our 80 acres of farmland to pay for college. The weight of that offer was immense to me as a teenager and truly made me rethink my plans. While he rented the land to a neighbor, it represented my father’s dream of someday farming his own land after years of working as a mechanic and retiring from the Army reserve. For him to be willing to give up that dream so that I could attend college right out of high school really highlighted the lengths that parents will go to provide for their children’s future, and the sacrifice he was willing to make for my future. While this offer caused significant internal reflection, I ultimately knew that serving in the military was the right decision for me.
Following my time in the service, and after giving a few different careers a try, I ultimately utilized the Post 9/11 GI Bill to attend college as a full-time student. Becoming the first person in my family to receive a bachelor’s degree felt like an incredible accomplishment, but it wasn’t without struggles. As anyone who has utilized the GI Bill knows, it offers amazing benefits and covers most of the major higher education expenses, but there are still costs that veterans or their family will have to cover. For example, the GI Bill provides $1,000 per year for books and supplies, which can be used up quickly if you are taking a full course load. Additionally, the GI Bill only provides 36 months of benefits, so while it covered all my undergraduate work, I still needed to take out student loans when I went back to school for an MBA. This is where savings in a 529 account can supplement the benefits that veterans’ or their families receive from the GI Bill.
This Veterans Day I strongly encourage my fellow veterans to explore the benefits that their service earned them, especially the GI Bill, if available to them. Visit the U.S. Department of Veterans Affairs website for more information
“As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.”
‒ President John F. Kennedy
About the Author
Jeremy Rogers is the Director of the New York 529 College Savings Program (NY 529) and previously served as a Nuclear Machinist Mate in the United States Navy. NY 529 includes the nation’s largest direct-sold program, New York’s 529 College Savings Program Direct Plan, which has over $43.7 billion in assets under management across nearly 1.1 million accounts, as of September 30, 2024. For more information visit nysaves.org or call 1-877-NYSAVES (1-877-697-2837).
By Rachel Biar, Deputy State Treasurer for Savings Programs, Nebraska
October 29, 2024
Saving for higher education expenses may seem like an overwhelming task for individuals and families alike. A few of the most common and fundamental questions we encounter are: How much should I save? Where should I start? Can my family help?
To help conquer some of these most pressing concerns, let’s talk about the top savings challenges you and your family may face—and tips to help overcome them.
“It’s hard to get started.”
Saving for higher education is an investment in the future, and I think you’ll be surprised just how simple it can be to get started with a 529 savings plan. 529 plans provide options for every level of investor. For most plans, there is no minimum amount needed to open a 529 account and there are no hidden fees you need to watch out for. Once you’ve opened your account, you will be able to contribute when it fits your budget schedule, and you will have access to your account giving you the flexibility to monitor your progress along the way.
“I don’t know how much to save.”
Mapping out a budget can help you get started and assist you with your savings goals. Additionally, most 529 plans offer a College Savings Planning Calculator. This tool provides savings projections tailored to your specific goals so that you can determine your contributions and save with confidence. One of the great benefits of saving with a 529 account is that you choose the amount to save in a way that best works for you while working toward your financial goals.
“I don’t have enough time.”
Life is busy, and we and our budgets often get pulled in many directions. When you feel overwhelmed, take a moment, and realize it’s never too late to start saving for education costs. Sometimes just starting is all you need to do. Begin saving as early as it fits into your budget and try to save as often as possible to be prepared for the expenses associated with higher education. Setting up an automatic monthly contribution is a terrific way to keep your savings goals focused.
“It’s hard to do it alone.”
With a 529 account, it’s easy for you to invite family and friends to join in your savings journey. Loved ones can help boost your savings efforts by using free online gifting services provided by your 529 plan or by using 529 gift cards. These options are user-friendly and typically do not require added fees. It’s okay to be transparent with friends and family members about savings goals. Don’t be afraid to ask loved ones to consider sending gift contributions for holidays, birthdays, and special occasions. You might be thrilled how happy they are to help you!
As the costs of higher education continue to rise, it can ignite fears for anyone. It is increasingly necessary for all of us to be aware of the diverse options available to finance educational expenses like tuition, room and board, books, supplies and more. For all those looking to pursue higher education, we are with you and here to help every step of the way. 529 savings plans are a useful and simple savings method offering easy enrollment, flexible contribution setup, tax advantages and ongoing account management.
Fear can have a significant impact on life and your financial success. Are you ready to defeat your higher education financing fears? All of us who work with 529 savings plans are here for you! We are dedicated to helping you make saving for college less scary, and we are here to help you continue working towards your higher education savings goals. Don’t let fear hold you back. Start saving with a 529 plan today!
About the author
Rachel Biar is Deputy State Treasurer for Savings Programs in Nebraska and serves as Past Chair of the College Savings Plans Network. In her role she serves as the Director for the NEST 529 Education Savings Program. The Nebraska Educational Savings Trust (NEST) provides four plans: NEST Direct College Savings Plan, the NEST Advisor College Savings Plan, Bloomwell 529 Education Savings Plan, and the State Farm 529 Savings Plan. The Nebraska State Treasurer serves as the Program Trustee. Union Bank & Trust serves as the Program Manager, and all investments are approved by the Nebraska Investment Council. Families nationwide are saving for college using the NEST 529 plans, which have $7.2 billion in assets and 300,000 accounts. Visit NEST529.com and treasurer.nebraska.gov for more information.
James Diossa, General Treasurer, State of Rhode Island
September 24, 2024
September is College Savings Month! With the cost of higher education rising at an unprecedented rate, it’s never too early to start saving for your child’s future.
As someone who grew up in a working-class family, I understand the challenges that many people can face. My parents did not have the opportunity to attend college. They immigrated to Rhode Island, motivated by a dream of a better life for their family, worked endless hours in low-paying jobs, and instilled the value of education in me. However, they couldn’t put money aside for my higher education. I was on my own and had to rely on loans to pursue my college education.
After graduating from Central Falls High School, I attended the Community College of Rhode Island before transferring to Becker College. There, I was able to become the first in my family to receive a college diploma. While this was a very special milestone, with that diploma came with tens of thousands of dollars in debt that I continue to pay to this day.
This is why, as the General Treasurer of the State of Rhode Island, I want to ensure that a student’s dream of pursuing a higher education is not deferred by financial challenges.
Thankfully, with 529 plans across the country, families can save for their children’s future educational goals. These plans allow for families to save for education in an easy, flexible, and tax advantaged way. The money you invest into a 529 plan can be used for the cost of colleges, universities, trade and vocational schools, and even apprenticeship programs. These savings can be used for more than just tuition, room, and board. You can use your savings for other expenses like books, computers, and other related expenses. You don’t need a lot of money to get started. In fact, even setting aside a few dollars a month can make a big difference over the course of several years.
By using a 529 plan to invest in your child’s education today, you will be building a pathway to opportunity for them tomorrow. I urge you to visit https://www.collegesavings.org/529-search-and-comparison for more information.
About the author:
James Diossa is the General Treasurer of the State of Rhode Island. As General Treasurer and Chair of the State Investment Commission, he serves as the administrator of Rhode Island’s two 529 plans, CollegeBound 529 and CollegeBound Saver. Visit collegeboundsaver.com for more information on ways to save through a 529 plan.
By Jessica Wetzel, Wisconsin 529 College Savings Program, Department of Financial Institutions
September 10, 2024
Being a grandparent is an exciting and fulfilling role. From babysitting and going on family vacations to being a pillar of comfort and support, you play a pivotal role in your grandchildren’s lives. You also have the unique opportunity to significantly impact your grandchildren’s future by contributing to their education savings. This gesture not only eases the potential financial burden of college but also inspires confidence and motivation for students, knowing that their family is behind them every step of the way.
One of the most common ways to save for higher education is with a 529 college savings plan. These tax-advantaged accounts offer tax-deferred growth, tax-free distributions when paying for qualified higher education expenses, and many states offer their taxpayers an income tax deduction or credit on contributions.
Even better is that grandparents can experience additional benefits when saving with a 529 plan, all while giving their grandchildren a gift that truly lasts a lifetime. As a grandparent, you can choose to open your own account for a grandchild or contribute to an existing account, likely owned by their parents. Each option is impactful and offers its own unique set of benefits.
Open Your Own 529 Account
When you open a 529 account and name your grandchild as the beneficiary, you can select your own investment options, receive quarterly statements, access the account online anytime, and eventually take distributions to pay for your grandchild’s tuition or other higher education costs. You can also feel confident that your grandchildren know that the funds saved are from you. And it’s okay if your grandchild already has a 529 plan; they can have multiple accounts opened for them.
The most significant benefit of choosing this route relates to your grandchild’s financial aid eligibility. In the past, money withdrawn from a grandparent-owned 529 plan was considered untaxed income for the student, which could have potentially reduced their financial aid package. Under the new Free Application for Federal Student Aid (FAFSA), distributions from a 529 account owned by grandparents are no longer counted as untaxed income for the student, meaning you can help pay for your grandchild’s education without harming their ability to receive financial aid!
Don’t live in the same state as your grandchild? No problem. Funds saved in a 529 plan can be used at any accredited school, not just those in your state or in the state where the beneficiary lives.
Contribute to an Existing 529 Account
Perhaps you’re just concerned with helping your grandchild pursue the college and career of their dreams, and less interested in managing a new account. If your grandchild already has a 529 plan set up by their parents or anyone else, you can easily contribute to that account for birthdays, holidays, and other special occasions or milestones. Some families even establish informal, matching contribution agreements where grandparents match any contribution a parent or student makes to the account. That way, contributions are doubled and can grow over time!
With this option, you don’t need to worry about opening the account, managing your investments, or taking distributions down the road when your grandchild starts their higher education journey. And even though you are not the account owner, you can still experience tax benefits, like a tax deduction or credit if you’re contributing to your home state’s plan, or if your state allows you to claim this benefit on contributions to any state’s plan.
The Gift of a Lifetime
By taking an active role in saving for your grandchildren’s education, you’re not just helping them financially; you’re demonstrating the importance of planning for the future. Setting aside even a modest amount of savings can be one of the most meaningful gifts you give them – one that will truly last a lifetime.
About the Author
Jessica Wetzel leads the Wisconsin 529 College Savings Program at the State of Wisconsin Department of Financial Institutions (DFI). In this role, she develops effective marketing and outreach strategies to increase awareness of the state’s two 529 Plans – Edvest 529 (direct-sold) and Tomorrow’s Scholar (advisor-sold) – by partnering with entities across the state on educating families on the importance of developing a higher education savings strategy. Before joining DFI, Jessica worked for over a decade in Wisconsin’s community and economic development sector. She successfully led and supported programs and organizations dedicated to helping low- to moderate-income individuals and families achieve homeownership, start small businesses, and join the financial mainstream.
By Young Boozer, Alabama State Treasurer
August 27, 2024
Next month is college savings month. When I talk to folks about saving for college, usually the first thing they ask is, “When is the best time to start?” I like to immediately say, “at birth.” It gives you the maximum time to accumulate and grow your savings to the student’s matriculation day.
I advise them to take advantage of time. When your child arrives, put your young one in the budget. Plan to set aside regular contributions into a 529 program. Be diligent and consistent throughout the years to come. Fit it into your household budget. Look to increase the deposits over time as your financial situation improves. A monthly amount of $20, $50, or $100 can build dramatically over 18 years. Get started at birth.
The old adage is, “Time is money.” To afford college, let’s start a new saying. Money saved over time is more money over time. The college savings goal is to build our savings to avoid having to take out student loans. It is far better to save today than borrow tomorrow. Make today the day you start saving.
One is never too young to be the beneficiary of the magic of compound interest and the dollar cost averaging technique. Real early in life is the best time to persuade family and friends to make a gift of cash to a 529 account rather than a breakable toy for ALL the gift giving days.
The 529 plan has a glorious feature that allowed me to ensure I was saving for my grandson on the day of his birth. In expectation of imminent arrival, I opened and invested in a CollegeCounts529 in the great state of Alabama several months before his birth in his mother’s name. After his arrival and receipt of a Social Security Number, I changed the beneficiary designation to that lucky young man. He was earning from day one.
He’s off to a great start! You and your young one can be, too.
About the author:
Young Boozer is the 41st State Treasurer of Alabama, Chairman of Alabama’s Prepaid College Tuition Program (PACT); Alabama’s 529 college savings program, CollegeCounts; and the Alabama ABLE Savings Plan. He also serves on the CSPN Governance Committee. Visit treasury.alabama.gov for more information on ways to save through a 529 plan.