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Daily Court Reporter - News New year, new savings resolutions

 

New year, new savings resolutions

Are you wondering what your little baby will be as he or she grows up?

Will they go away to a big school or stay close to home at a small college?

Maybe they’ll want to go to one of those coding schools. Or a tech school where they build jet engines. Yeah … jet engines.

No matter what, no matter where, Ohio’s tax-free 529 college savings plan is a simple way to save for any higher education goal and it’s accepted nationwide.

So if one of your New Year’s Resolutions is to start saving to your child’s future higher education, 2019 is the perfect year to start an Ohio 529 college savings account. And it’s simple to do.

Why Save In A 529 Plan?

529 plans are specialized higher education or college savings accounts. 529 plans can be used at an federally accredited higher education institution — from two-year, four-year, graduate, trade or vocational schools. Another advantage is that 529 plans are accepted nationwide. Therefore, if you save with Ohio’s 529 Plan, your child can you use your Ohio 529 for any type of degree, at any accredited college, university or other program in the country.

There are tax benefits for saving for college with Ohio’s 529 Plan, such as tax-free earnings and tax-free withdrawals for qualified higher education expenses. In addition, Ohio residents are eligible to deduct up to $4,000 of their 529 plan contributions per beneficiary, per year, from their state of Ohio taxable income. However, they can contribute even more! Contributions over $4,000 per beneficiary, per year, can be carried forward to deduct from future tax years, until all of their contributions are fully subtracted from their state taxable income.

How To Open An Ohio 529 Plan

Opening an Ohio 529 Plan is simple and easy to do. Start by visiting CollegeAdvantage.com and click on the tab that says, “New To CollegeAdvantage.” Select “What’s A 529,” and start reading the information on the next few pages to have a better understanding how a 529 plan works and why it’s the best choice in which to place your college savings. The last page is titled, “Before Opening An Account,” shares what information you’ll need to have on hand to open an account. After that, at the top on the web page, there’s a “Open An Account” hyperlink. Select it and you can start saving for your child’s future higher education!

Already Saving In An Ohio 529 Account?

Is your New Year’s Resolution is to step up your college savings goals? Here are some ideas to try.

Review your 529 account. Are you putting enough funds aside to cover what you’d like of your child’s college costs? If you want to check the numbers, use our College Savings Planner to receive personalized saving information. You can vary your college savings goals to receive an estimated monthly amount needed to meet that savings objective. Please note that these examples are for illustrative purposes only.

See if you need to change your savings strategy. As you child reaches a new life stage, you may want to update your strategy to reach your college savings goals.

Check your account balance and track the investment performances. If you would like to make a substitution to your 529 savings portfolio, you can make an exchange of an asset from one investment option to another investment option, twice in a calendar year for the same beneficiary.

Simplify your savings by setting up automatic deposits into your Ohio 529 account. You can set up contributions to match your paycheck deposits or create your own monthly schedule. Some employers offer payroll deduction, where a portion of your pay is directly deposited into your 529 account.

Convert your disappearing expenses into regular 529 contributions. Disappearing expenses are those costs in your family’s budget for only a limited time span. For example, preschool and daycare are large disappearing expenses once a child starts kindergarten. Once your family no longer need those services, deposit those funds into your 529 plan. You won’t miss the money while you continue to support your child’s educational needs.

Add your federal tax returns, pay raises, or bonuses to your 529 account. The average federal tax return nationally for 2017 was $2,763. Saving this amount each year to a 529 plan could cover over 40%. Saving $4,000 each year could cover as much as 60% of college at an Ohio public university, based on 18 years to save.

Invite other family members and friends to contribute to your child’s 529 plan with Ugift rather than giving toys or clothes. You can assure them that giving the gift of a higher education is much more meaningful and beneficial for your child’s long-term success.

Shop with Upromise, a free loyalty program that offers its members cash back for their purchases from a wide variety of businesses. When you connect your debit and/or credit card to your Upromise account, you can start earning rewards with your everyday shopping. Then link your Upromise account to your CollegeAdvantage Direct 529 Plan account to roll over these rebates.

Every dollar contributed to a 529 will grow tax-free and can be withdrawn tax-free so keep moving forward to reach your college savings goal.

No matter what, no matter where, Ohio’s tax-free 529 college savings plan is a simple way to save for any higher education goal and it’s accepted nationwide. A happier new year starts at CollegeAdvantage.com.

About the Ohio Tuition Trust

Established in 1989, the Ohio Tuition Trust Authority is a state agency within the Ohio Department of Higher Education. The Ohio Tuition Trust Authority sponsors and administers CollegeAdvantage, Ohio's 529 college savings program.

Ohio’s CollegeAdvantage program provides families across the nation flexible options and educational resources to invest in our trusted tax-advantaged 529 plans for education expenses after high school.

An 11-member board oversees the investments of the Ohio Tuition Trust Authority. The Governor of the State of Ohio appoints six members, with the advice and consent of the senate, who have significant experience in finance, accounting, or investment management.

The Speaker of the House of Representatives of the State of Ohio and the President of the Senate of the State of Ohio each appoint one member of the respective legislative body from each political party.

The Chancellor of the Ohio Department of Higher Education also serves as an ex-officio, voting member of the board.

Date Published: January 21, 2019

 

Ohio Tuition Trust Authority

 

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