This post is sponsored by BabbleBoxx.com on behalf of New York’s 529 College Savings Program Direct Plan. The content and opinions expressed in this post are my own.
While it's been an unconventional start to the new school year, my boys are thrilled to be back, getting face-to-face time with their teachers and peers, even if it is only part-time. I'm hoping, as I'm sure we all are, that COVID-19 illnesses remain low and restrictions continue to ease up so that in-person learning, clubs, and sports can eventually return to what they were pre-COVID.
One of my favorite things about living on Long Island is that we have access to beautiful beaches, state parks, and nature preserves. All of these resources make it easy to continue our children's educations outside the classroom, especially during these trying times. Whether it runs in the family or is a result of the environment we are lucky to live in, all three of my boys love nature and are budding little scientists. We love taking them on hikes and bicycle rides to point out the flora and fauna of our unique neighborhoods. They particularly love fishing, astronomy, and science experiments of any kind!
Whatever subjects pique their interest most, we hope they'll pursue them academically and go onto higher education. In anticipation of these dreams and our desire to help ease the burden of college debt for both us and them, we immediately set up NY’s 529 College Saving Program Direct Plans for each of the boys after they were born.
Contributions to NY 529 Direct Plans are made from after tax dollars and any earnings accumulate on a tax-deferred basis. Qualified distributions from a 529 plan are tax-free (talk to a tax advisor about your particular situation)*. Most states offer these investment accounts with tax benefits to help families save for college. Even if it's a year that we don't have a lot to set aside, NY 529 puts the power of time on our side, with tax advantages now and flexibility later. The program has been run by the State of NY for more than 20 years.
NY 529 offers state tax benefits too.** New York’s 529 Direct Plan has several advantages compared to other state 529s. Fees are some of the lowest, there is no minimum contribution, and it’s easy to join and manage your account. The money in a NY 529 Direct Plan savings can be used at thousands of eligible colleges, as well as graduate, vocational and technical schools. If it turns out 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. One of my favorite aspects of the programs is that friends and family members can also make easy online contributions as gifts.
It seems like no-brainer. Have you set up 529 plans for your children? It's an amazing feeling to know you're supporting their dreams and future prospects financially as well.
*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 nonqualified 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