This holiday season, consider an alternative to traditional presents; saving for your loved one's college education. Saving for college in a 529 plan as a child grows is a critical and effective savings tool for families wishing to ease the financial burden of college in the future. Learn more about the 529 plan and read tips on how you can start saving for your loved one's education.
For those looking to invest in a loved one’s education this holiday season, the College Savings Plans Network (CSPN) is offering the following tips:
Study Up: Find out if the gift recipient already has a 529 savings or prepaid tuition plan in place. If so, get the account details, check what gifting options the plan offers and contribute. If they don’t already have an account, consider opening an account for them. Anyone can set up an account for any recipient: grandparents, other relatives or family friends can all be account owners. Be sure to compare plans for different states to find the one that is right for you and the beneficiary.
Early Bird Benefits: Gifts can be most valuable when contributed early in the recipient’s life, so they have more time to potentially grow. However, you may open or contribute to an account to save for the future education of an individual of any age.
A Gift for the Gifter: The holiday season is a great time to contribute. Many states offer tax deductions to 529 plan contributors and/or account owners, which must be in by the end of the year.
Small Amounts, Big Difference: Check the minimum contribution limits each plan has, as most plans have low minimum contribution requirements. A gift as modest as $15 or $25 a month can make a big difference in the long run. Also, if a few family members each contribute, that can make an even greater impact.
Consider Yourself: If you’re looking for gifts to add to your own wish list, check your state’s 529 plan to learn about how to set up easy gifting and invite others to lend a hand.
For more information about 529 college savings plans, including links to all 529 plans and a unique plan comparison tool, please visit CollegeSavings.org