Five Basic 529 Questions for 529 College Savings Day
May 23, 2017
By Peg Creonte, senior vice president of new business and marketing at Ascensus College Savings
As we celebrate 529 College Savings Day (5/29), we want everyone to know that saving for college is possible.
Don't get overwhelmed thinking about saving for the full, sticker price of college. Saving for college does not mean saving for all of college. Save what you can, when you can.
As the nation's leading 529 program manager, we are currently helping families save for the futures of four million children. Over half of their accounts have balances of under $10,000.1 That amount won't pay for all of college, but it may help when the bill arrives.
If you don’t already know all about 529 plans—and many people don't2—here are five basic questions, and the answers, about 529 plans:
- What is a 529 plan?
A 529 is an investment account designed specifically to help save for college. There are many 529 plans sponsored by states across the country. While they share most of the same features each plan is unique and comes with its own benefits.
- Does my state have a 529 plan?
Most states do. Some states will offer a state tax deduction or credit or other benefits to in-state taxpayers. So, before investing in any 529 plan, we suggest that you look at your home state's options first. We have a great website that helps you find a plan in your state.
- How do I get a 529 plan?
If you are comfortable with investing on your own, you can open an account online. Most plans offer investment options that are customized to a future student's age to assist account owners in selecting investments. If you need assistance, you might want to find a financial advisor and ask them about starting a 529 plan.
- Can I save for college a little bit at a time?
Yes! 60% of contributions made to our accounts are for $100 or less.1 These can be made when you have the extra money, or set up to happen automatically from your bank account or through payroll direct deposit at work.
- When is it too late to start a 529 plan?
Never! On average we see most accounts opened for children age 7, but we also see accounts opened for kids much closer to college age.1 Remember, for every dollar you save today, that is a dollar less that you will potentially have to pay back with interest later.
529 College Savings Day is all about bringing greater awareness to the importance of saving for college and the benefits of using a 529. Raise your own awareness of 529 plans here at howtosaveforcollege.com.
1 Ascensus, Inc. 529 account data, as of 12/31/2016
2 How America Saves for College 2016, Sallie Mae