Back To School With A NY’s 529 College Savings Program

This post is sponsored by BabbleBoxx.com and contains information on New York’s 529 College Savings Program Direct Plan. The content and opinions expressed in this post are my own.

Parents, Are we all ready for back to school or in our case Homeschooling? 

It’s incredible how time has flown by. In a couple of weeks, we all must be ready again to start a brand new school year full of uncertainty and questions that basically can’t be answered in a timely manner. 

For our kids time is also passing, they are growing to a speed that we can’t even imagine. See, my firstborn is already 17 years old and about to start his senior year in high school. The little one is 6 and starting her 2nd grade. I know now that just like what happened with my son the little one will grow and will think to head onto college right away. 

I have always said to them that education is the mainstream for their abilities and for us to be able to help them gain those abilities is a must. 

WHAT DOES YOUR CHILD WANT TO BE IN THE FUTURE? 

I have asked both my kids this question many, many times and there is always a different reply. From Chef to Gym Trainer and from a Veterinarian to a Fashion Designer. I enjoy taking the time with them and helping them focus their heart in whatever they want to engage with in the future. But as a parent in order to help them we need to start somewhere right? .

WHY I LIKE THE NY’s 529 COLLEGE SAVINGS PROGRAM  

My husband and I have looked into different plans like savings accounts, trusts, etc. For many of them, our kids will have all the power on how to spend the money once it became theirs. The best part with the NY 529 Direct Plan is that it’s designed for higher education savings.  Plus, the account owner—not the beneficiary—is always in control of the account, even when the beneficiary becomes an adult.

WATCHING THE NY 529 ACCOUNT OVER TIME

Every month we have been contributing to the account. Even if you have only the minimum to save right now, the NY 529 College Savings Program puts the power of time and compounding on your side. We’ve also asked relatives to contribute as well. On birthdays and/or special occasions we asked the family to contribute to their 529 accounts instead of games or toys. Education is the best gift. 

What exactly is a 529 Savings Plan?

529 plans are investment accounts that help families save for college. Because they’re federal tax-advantaged.* Many states, like New York, offer state tax benefits too**. (Talk to a tax advisor about your particular situation.) New York’s 529 Direct Plan has several advantages we liked compared to other state 529s. Fees are among the lowest, there is no minimum contribution, and it’s easy to join and manage your account online.

The NY 529 Direct Plan helps families save in order to avoid burdensome student loan debt. The more you can put aside for college now, the fewer loans your child may have to take. Saving rather than borrowing also makes your overall College costs much lower.

NY 529 account savings can be used at thousands of eligible colleges, as well as graduate, vocational and technical schools. They are not ‘use or lose.’ If the student doesn’t need the savings, family members can use them, or account proceeds may be used for non-qualified expenses; but taxes and a penalty will apply to the amount withdrawn.* (Please check with your tax advisor for the rules. And keep in mind that 529s are investment accounts, so they can lose money.) Friends and family members can also make easy online contributions as gifts.

Thinking Forward

Tell me if this isn’t true, we all swear we’re going to begin saving for college even before the baby is even born. Having to pay for student loans is a total nightmare, and of course, no one wants their child to spend the rest of their adult life paying off student loans. But sometimes, life happens. Jobs are lost, families have emergencies, cars break down, you name it, things can happen at the most unexpected time. But you know what, it’s never too late or too early to start saving but now is better than later!

It doesn’t really matter what our children want to be in the future as long as we are next to them on their journey. I know for them it is like helping them reach the stars. 

DISCLOSURES

*Earnings on federal nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements. Please consult your tax advisor about your particular situation.

** Contributions of up to $10,000 are deductible annually from New York State taxable income for married couples filing jointly; single taxpayers can deduct up to $5,000 annually. New York State tax deductions may be subject to recapture in certain circumstances such as rollovers to another state’s 529 plan, federal non qualified withdrawals, or withdrawals used to pay elementary or secondary school tuition, registered apprenticeship program expenses, or qualified education loan repayments as described in the Disclosure Booklet and Tuition Savings Agreement. State tax benefits for non-resident New York taxpayers may vary. Please consult your tax advisor about your particular situation.

Investment returns are not guaranteed, and you could lose money by investing in the Direct Plan. 

For more information about New York’s 529 College Savings Program Direct Plan, download a Disclosure Booklet and Tuition Savings Agreement [nysaves.org] or request one by calling 877-NYSAVES (877-697-2837). This document includes investment objectives, risks, charges, expenses, and other information. You should read and consider them carefully before investing. 

Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other benefits that are only available for investments in that state’s 529 plan. Other state benefits may include financial aid, scholarship funds, and protection from creditors. 

The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the Program Administrators and are responsible for implementing and administering the Direct Plan. 

Ascensus Broker Dealer Services, LLC, serves as Program Manager and, in connection with its affiliates, provides recordkeeping and administrative support services and is responsible for day-to-day operations of the Direct Plan. The Vanguard Group, Inc., serves as the Investment Manager. Vanguard Marketing Corporation provides marketing and distribution services to the Direct Plan. 

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, LLC, 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 Advisor-Guided Plan, which is sold exclusively through financial advisors and has different investment options and higher fees and expenses as well as financial advisor compensation.
© 2021 New York’s 529 College Savings Program Direct Plan

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