Saving for College
December 1, 2019 | by anna rogers
The end of the year and the holiday season always brings along plenty of spending. With purchasing gifts, decorating and hosting, holiday travel, and more, spending money is the Christmas-time norm. Maybe this is the year to take a breath and use the holiday season for more than just spending!
December is the perfect time to start saving for college. With benefits like 2019 income tax return savings and the opportunity for unique gift-giving that pays dividends for a lifetime, investing in a 529 college savings plan should be on your holiday to-do list.
What’s a 529 Plan?
A 529 College Savings Plan is a way to save for college with tax and financial aid benefits offered at a state level across the country. Achieve Montana, Montana's 529 plan, makes saving for your child's higher education simple. The program provides a wide range of investment options with easy ways to give and grow your savings.
How can the 529 money be used?
You can use the assets in your Achieve Montana account toward the costs of nearly any accredited public or private college, and you’re not just limited to a four-year university. Money in your 529 savings account can be used for a two- or four-year college, technical or vocational school, graduate school, medical school, or law school.
The beneficiary of your Achieve Montana plan does not have to attend college immediately after graduating from high school. In fact, there are no time or age restrictions on when the beneficiary can use the funds for higher education expenses.
“Statistics show that children who know that someone is saving for their college are more likely to attend college,” says Ronald Muffick, Director of Operations and Administration for the Office of the Commissioner of Higher Education at Montana University. “If you don’t save, you won’t have money set aside for college costs when your family receives that college bill,” he adds.
A lack of saving often leads to a need for borrowing, and saving is cheaper than borrowing by a long shot. By investing in a 529 plan, you can put your money to work for you by earning a return on your investment, on top of avoiding high interest on a college loan. Saving for college early on frees you and your child from the bondage of future student loans.
With an Achieve Montana account, you enjoy a choice of investment options based on risk tolerance or child’s age, tax-deferred earnings, tax-free qualified withdrawals, control over how assets are used, and gift and estate tax advantages.
For Montanans, contributions to Achieve Montana may be eligible as a yearly deduction from adjusted gross income in computing Montana state income tax, up to $3000 per taxpayer per year ($6000 for those married, filing jointly).
When should I start saving?
The earlier you start to save, the better! “The longer you save, the more time your money has to work for you,” says Muffick. "The difference in waiting just a few years to invest can be eye-opening." You can open an Achieve Montana account for as little as $25 and set up automatic contributions to help meet your savings goals.
If you’re the parent of an older child but haven’t started to save for college yet, don’t worry! It’s never too late to start saving. Even if your child is almost ready for college or in college, you can still save with an Achieve Montana 529 plan.
Make 529 gifts part of your giving this holiday season!
It’s easy for friends and family to give to an Achieve Montana account online or with a check through Ugift. Parents – share your child’s 529 information with grandparents and other family members as an option for giving this Christmas season. People love to contribute to a meaningful cause.
When planning your gift-giving for children, nieces and nephews, or grandchildren, consider setting aside a small portion of what would otherwise go toward a toy or other item and deposit this into their college savings account. Ask the parents if they have a 529 plan set up for their kids. Remember that this is a gift for their future that will pay off in many ways – freeing them from crippling college debt, investing in their future career, and giving them the confidence to excel as students even at a young age, knowing that college is an option for their bright future!
Start saving with Achieve Montana’s 529 college savings plan today at AchieveMontana.com.
Originally printed in the December 2019 issue of Simply Family Magazine
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Anna Rogers is a transplant from the Carolinas with a background in marketing and graphic communications. She is a wife and mother who loves to garden, cook, and practice yoga. Anna is passionate about travel, which at its core is really a passion for people, as she believes people and community are what truly bring life and beauty into a place.