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Kids are bursting with creativity and imagination. At Momtrends, we're big believers in fostering talent and driving motivation and inspiration. Plus, we like to have good old-fashioned FUN with our families.

Of course, while we're busy happily playing and creating, as parents, we also want to plan and prepare for the futures of our budding artists and academics.

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In that spirit, Momtrends recently hosted a group of influencers for a lunch-learn-and-make event with the financial experts at Vanguard at The Craft Studio in NYC. While our littles enjoyed ceramic painting, chocolate bar building, and other artistic activities, the blogger-parents were schooled on the importance of starting a college savings plan now. 

Many of us have young kids at home, and with life's daily expenses and other pressing financial obligations on the immediate horizon, we may think we don't need to jump on college savings just yet. But the fact is: there's no time like the present. Higher education is not getting any cheaper, and you and your growing children are going to want all the help you can get. That's why starting a NY529 plan is so important.

The NY529 plan is one of the simplest ways to start saving for a child’s higher education. Anyone can start one (parents, grandparents, aunts, uncles, relatives!), and the initial investment can be as little as $1--so there's really no excuse not to get moving on this.

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But, still, how will a NY529 plan benefit you and your child in the future? And why choose a NY529 over other types of plans?... Let's break it down to the fundamental elements:

  • A 529 is a type of investment plan, sponsored by a state, that can only be used for higher-education savings.
  • Your 529 earnings grow federally tax-deferred and qualified withdrawals are tax-free. If you’re a New York State taxpayer, you can also benefit from the state tax deduction.
  • Anyone can open a 529 account. As the owner of an account, you choose the investments (a representative can walk you through this process). Depending on the age of your child and the risk-reward ratio you want to take, you can select your portfolio (i.e. a stock-based plan or a bond-based plan). 
  • The account owner also assigns a beneficiary and determines how the money is used. A NY529 can be used for college, accredited trade and vocational schools, graduate school, accredited international programs, and other relevant expenses, like room and board fees, books, supplies, etc.
  • As the account owner, you can change the beneficiary to a sibling, a relative, or even to yourself, as needed.
  • You can contribute up to $75,000 in a single year ($150,000 if married and filing jointly) for each beneficiary, without incurring federal gift taxes as long as you don't make any other gifts to that same beneficiary for five years.)
  • You pay only pay $1.30 in fees per year for every $1,000 you invest in the plan (0.13% total annual asset-based fee).
  • You can withdraw money for other uses, but will face a 10 percent penalty. Other federal and state taxes may also apply.
    • But one of the most important things to note is that having a NY529 will not majorly impact your child's ability to get financial aid. This is a common misconception that leads many people to avoid creating a savings account. 

    So whether you're creative kiddos are going to be artists or lawyers, the NY529 can help you and them get started on this exciting and educational journey. 

    This is a sponsored post.

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