Thursday, December 7, 2017

Our thoughts on planning for College

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A few months back, I shared our plans for setting our son up with a 529 College Saving Plan. Today, I want to share some of our experiences we had in this process. I figured the Holiday Season would be a great time to share our investment strategies. We all are getting ready for the new year and planning budgets. You might want to also consider including your child's college fund. 

 Compensation was provided by NY 529 Direct via Momtrends. The opinions expressed herein are those of the author and are not indicative of the opinions of NY 529 Direct or Momtrends. 
Does that last sentence scare you? Where will you get the money with your budget already stretched so thin? These are the questions my spouse and I asked ourselves too. I strongly urge you to take some time and really plan ahead though. I am not trying to sell you anything just sharing some of our reasons behind saving for our son's college experience NOW. Maybe some of these reasons might resonate with you! I wish my parents had set up some sort of college fund because it took years for me to afford that luxury. The idea of of scrambling at the last minute for his education scared me! Using this particular plan allowed us to save and invest as he grows. 

There are many different programs you can use and we looked into several. 
Let me explain why we choose the NY 529 plan:
1. Beneficiaries can attend college in any state, not just the state sponsoring the #529 plan.
2. There is no age limit for beneficiaries of a 529 on a 529 plan.
3. A beneficiary can have more than one account. For example, parents can open an account for a child and grandparents can open an account for the same child.
4. This plan has tax deductions, tax-deferred growth, and tax-free withdrawals.
Anytime you are putting money into something it is helpful to know exactly what you are getting into! If you missed my last post on how we set it up etc. here are some of the questions we got asked by family and friends when we started investing in the NY 529 plan:

What is a 529 college savings plan? 
It's a type of investment account you can use for higher-education savings later on. Your earnings grow federally tax-deferred, qualified withdrawals are tax-free,* and some states (like New York) have other tax benefits as well.** These are great if you have a little one like I do and want to save ahead for their future schooling pans! 
Who can open a 529 plan account? 
Just about anybody can open a 529 account—parents, grandparents, other relatives, friends—as long as he or she is a U.S. citizen or a resident alien. If you're a New York State taxpayer, you can also benefit from the state tax deduction.** My Mother ( grandmother) has one as well for my son because we all want to contribute in some form! 
How can I use the money in a 529 account? 
You can use it 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, and computer-related services; and certain room and board fees. Like, I said since my mother also has one for him we figured the money can cover most of his expenses as they come in. Depending on which plan you choose you can gear it to be more conservative or more aggressive.
As parents we never realize just how fast time flies. Ever since I had our son his life has flown by in a blink of an eye. I don't want to worry about his college tuition because I waited to the last minute to save for it. I might have to put down the toy in the check out counter to help save money and invest in his future, I think he will understand. 
"An investment in knowledge pays the best interest". - Benjamin Franklin 
What are your thoughts on Saving for the future?
Have you started to plan your child's college, yet? 

No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, Inc., Ascensus Broker Dealer Services, Inc., nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio.
New York’s 529 College Savings Program currently includes two separate 529 plans. The Direct Plan is sold directly by the Program. You may also participate in the Adviser Plan, which is sold exclusively through financial advisers and has different investment options and higher fees and expenses as well as financial adviser compensation.

For more information about New York’s 529 College Savings Program Direct Plan, obtain a Disclosure Booklet and Tuition Savings Agreement atwww.nysaves.org or by calling 1-877-NYSAVES. This includes investment objectives, risks, charges, expenses, and other information. You should read and consider them carefully before investing.  

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