5 Things You Need To Know About College Saving 529 Plans
I'm so excited to be a Scholarshare Ambassador for 2015 and I'll be sharing sponsored posts throughout the year filled with college savings and planning information. Today is the perfect day to talk more about college savings accounts because Friday is national 529 Day!
One of the first things that new parents think about is college savings.
It was no different for us. As soon as we found out we were going to be parents we started thinking about college savings for our new baby… but then life got in the way (babies are exhausting and time consuming). We kept saying we needed to do it, but we also felt like we had years to plan and save.
We learned pretty quickly that life goes by quickly and that the perfect time to start saving for college is as soon as possible!
Fast forward 15 years and we are now two years away from our oldest starting college. Thankfully we have been saving for her college education for years… but when she was born we didn't have the same options we do now for our littlest one, namely a state-sponsored 529 plan. And we both agree that would have made a big difference in how we saved.
If you have been thinking about starting a college savings account, then Friday is your lucky day since it's 2015 ScholarShare 529 Day!
National 529 Day (May 29) is celebrated nationally by state-sponsored 529 plans to raise awareness about the importance of saving for college and the value of 529 plans, it is also ScholarShare’s 529 Day Matching Promotion Day! In celebration of National 529 Day on May 29, 2015, ScholarShare launched its 529 Day matching promotion, “You Start It, We Match It.”
If you open a ScholarShare 529 College Savings Account on Friday, May 29, 2015 from 12:01 a.m. PT to 11:59 p.m. PT and ScholarShare will match $50 of the initial deposit. Pretty cool right? It's free money to help kick off your college savings account.
To be eligible for ScholarShare’s matching promotion, California families will need to:
- Open a new ScholarShare College Savings Plan with an initial deposit of at least $50 – to be contributed and invested at the time the new account is opened.
- Enroll in the automatic contribution plan (ACP) for the new account with at least a $25 contribution per month.
The matching deposit of $50 will be made to the eligible ScholarShare 529 account on or before 11:59 p.m. PT on Dec. 15, 2015. There is a limit of one matching deposit per new ScholarShare account opened for a new beneficiary. ScholarShare is California’s 529 College Savings Plan, a state-sponsored, tax-advantaged investment vehicle designed to help and encourage families to save for future qualified higher education expenses. The ScholarShare College Savings Plan is offered by the State of California. TIAA-CREF Tuition Financing, Inc. (TFI) is the Plan Manager.
Sounds pretty great right?
Here are 5 more things you need to know about ScholarShare 529 College Savings Accounts:
1. There are options for everyone and their needs. ScholarShare offers 19 investment portfolios, giving account holders more options, depending on their savings goals and risk tolerance.
You can even open an account for yourself if you have plans to go back to school! If you have limited time till the money is needed there are options that are more conservative and other choices if you have more time and can take more risk. They also have an option if you are more comfortable taking no risk with your investments.
Since its inception in 1999, the number of ScholarShare accounts has grown to more than 260,000 with over $6.3 billion in total plan assets. In 2014, ScholarShare helped California families meet their higher education needs, with nearly $300 million withdrawn by families to pay for qualified higher education expenses.
2. Money saved is never lost if not used and can be used for more than just paying typical college expenses. ScholarShare offers a diverse set of investment options, and provides tax-deferred growth and withdrawals free from state and federal taxes when the funds are used for qualified higher education expenses, such as tuition and fees, books or even certain room and board costs.
3. If your child gets a scholarship a matching amount can be taken out penalty free. The money can also be used for accredited trade schools.
4. It only takes $25 to open an account. Any U.S. citizen, or resident alien with a valid Social Security Number or Taxpayer Identification Number, can open a new account, for as little as $25. And through ScholarShare’s “Give a Gift” option, parents, grandparents, aunts, uncles and friends can open a new account as a gift or make a gift contribution to an existing one.
5. ScholarShare accounts are easy to setup. ScholarShare has no annual account maintenance fee, no income limit and offers a high maximum account balance.
There are so many reasons to save for college, but I've found the best reason is that the earlier you start the better.
If you think you don't have enough extra money to contribute, think again. Just $25 a month can make a huge impact on the future. It all adds up and even if you don't have the whole amount saved before college starts, what you do have offsets what you will need to be made up with student loans. So often parents think that financial aid is a scholarship and doesn't need to be paid back. That's completely not true. Financial aid is just another word for student loans. Saving now means that there will be less or no student loans needed!
Take a moment and learn more about ScholarShare today and then be sure to visit ScholarShare on Friday to open a 529 account for the matching promotion!
Have you started saving for your child's college education?