These kids of mine are getting bigger and smarter and savvier every day. They’re growing up fast. It’s incredible and heart wrenching—my babies are turning into full-fledged people with strong opinions and even stronger personalities. It’s a good thing I can still cuddle them and kiss them and nuzzle them in their sleep—when they can’t give me sass!
Still, the fact that the days, and months, and years are flying by gets me a little weepy. And the idea that I have to be thinking about their college savings now also gets me a little teary-eyed... and, you know, makes my heart start palpitating. Deep breath...
Thankfully, I learned about the NY529 plan last year—and got a refresher course this past weekend!
Momtrends hosted some local bloggers and their children for a fun and educational afternoon at the Institute of Culinary Education. The littles got a lesson in the art of cooking (and whipped up an Italian feast for all their mamas!), while we were busy getting schooled on the benefits of this amazing savings program.
In short, the NY529 plan is one of the easiest ways to start saving for a child’s higher education. Anyone can start one (parents, grandparents, relatives!), and the initial investment can be as little as $25. And here’s the most important takeaway: it’s never too early or too late to start saving. And guess what? It only takes about 10 minutes to create an account. So, no more excuses, Mama... Those kiddies of yours aren't getting any younger!
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I’ve highlighted a few of the most important (and easily digestible!) facts about the 529 plan to help you grasp why it presents such a unique opportunity for parents and children:
- A 529 is a type of investment account, sponsored by the state, that you can use for higher-education savings.
- Your 529 earnings grow federally tax-deferred, qualified withdrawals are tax-free, and New Yorkers often see other tax benefits.
- Anyone can open a 529 account—and as the account owner, you choose investments (this sounds more stressful than it actually is--and someone will walk you through this process!), assign a beneficiary, and determine how the money is used. If you’re a New York State taxpayer, you can also benefit from the state tax deduction.
- There are no fees to open an account in New York's 529 College Savings Program Direct Plan. As mentioned, the initial investment must be at least $25. Once you have an account, you'll pay just $1.60 in fees per year for every $1,000 you invest in the Direct Plan (0.16% total annual asset-based fee).
- It can be used for college, accredited trade and vocational schools (including culinary school... and we think we might have inspired a few budding chefs at this event!), graduate school, accredited international programs, and other relevant expenses—i.e. certain room and board fees, books, supplies, equipment, software etc.
- You can change the beneficiary, as desired, to a sibling, a relative, or even to yourself—should you choose to go back to school (it's never too late for that either!).
- The contribution limits on 529 accounts are generally fairly high. With the NY529 Direct Plan, you can contribute up to $375,000 on behalf of one beneficiary. (This includes all New York-sponsored 529 savings accounts held for the same beneficiary.)
- You can withdraw money for other uses, but will face 10 percent penalty. Other federal and state taxes may also apply.
Suffice to say, we're so happy to, once again, spread the word and educate other parents about the NY529. Now is your opportunity to seize the day and start saving. Whether you've got a future culinary kid or a wannabe med student, the 529 plan has you covered... Now isn't that sweet?
This is a sponsored post.