Our children, our truest markers of ticking time, have a way of reminding us just how fleeting these precious moments of childhood are. It was just yesterday that I wrote this birthday letter for my son – but then I blinked and a few more years passed. And all of the sudden, while making memories in what feels like a beautiful and chaotic mess, the days somehow slip into years.
I know this truth, as the mother of an eight and now six-year-old.
And also, just yesterday:
How is that possible?
My kids have big dreams. Our oldest has her sights set on being an inventor (who will create a teleportation device), a scientist, and an artist. While the little guy dreams of being a chemist (the kind who mixes colorful potions) – and a LEGO builder too. Like all parents, we want our kid’s ultimate career dreams to come to fruition – but in the midst of the financial responsibilities that come with adulthood it can be concerning to think about paying for our children’s college education when many colleges currently charge more than $60,000 per year. What will the cost of college be in 10 to 15 years?
That’s why it’s crucial for parents like us to save for two college educations in the most efficient way possible – with a NY 529 Direct College Savings Plan for each child. I jumped at the opportunity to meet with the plan’s financial team along with NY’s First Deputy Comptroller Pete Grannis, at an intimate event at the Intrepid Museum, hosted by Momtrends Media.
When choosing a 529 plan to use towards your child’s two-or-four year university, accredited vocational school, or postgraduate program along with supplies and accepted expenses (computers, room and board, etc.) – it’s important to find out if your state offers tax deductions for 529 contributions. While states including New Jersey do not, New York 529 plans offer tax benefits.
- 529 account funds can be used in any state – they are not limited to the state sponsoring the 529 plan.
- Account contribution limits for 529 plans are generally high – from $200,000 to $300,000 or more, depending on the state. The Direct Plan, accommodates contributions up to $370,000 on behalf of one beneficiary. This amount includes all New York-sponsored 529 savings accounts held for the same beneficiary. Also, most institutions only count 6 percent of the total 529 funds as usable when determining financial aid eligibility. In comparison, 20 percent of traditional savings account are factored into the financial aid eligibility process.
- Many people can open a 529 account with as little as $25! Including, not only parents but other relatives and friends – as long as U.S. citizenship or resident alien status is established. The account owner selects the beneficiary, investments and how the funds will be used. If you’re a New York State taxpayer, you can also benefit from the state tax deduction.
- In lieu of toys that will be long forgotten, family and friends can contribute to kids 529 accounts creating a lasting gift that will grow over time.
To learn more about these powerful savings vehicles where earnings grow federally tax-deferred and where qualified withdrawals are tax-free – visit www.nysaves.org. For Financial AID information visit www.hesc.ny.gov.
This is a sponsored post. Opinions as always, are my own.