*This post is sponsored by BabbleBoxx.com on behalf of NY 529
My kids may not be attending school in-person this year, but they are embarking on an odyssey through virtual learning where they will master new skills, learn about new topics and face new challenges. This academic year, more than any previous year, brings its own unique set of challenges due to the unprecedented global health crisis. And after careful consideration we chose virtual learning as the default instruction method for the kids both to keep them safe and to help mitigate the spread of Covid-19. While embarking on this educational journey with my kids this year at times feels overwhelming, I’m so grateful for the opportunity to have a front row seat to my children’s developmental milestones and achievements.
Although I’ve never pursued a career in teaching, I actually have a Masters degree in Elementary Education and understand the STEM-based educational model, which emphasizes the value of creating hands-on learning experiences for kids. Children learn best through play and the best educational toys and games are those that teach academic concepts through real world applications. Through the use of fun family projects such as assembling a cardboard rocket, we are nurturing children’s love of learning and expanding on their curiosity about the world. Taking time out of our busy lives to connect with our children in these meaningful ways is invaluable in their learning process and may help them to develop a life-long love of learning.
Equally as important as investing our time into our children is the financial investment in their future education. As parents, most of us want to give our children the opportunity to experience a quality college education. But with the rising costs of college, it’s prudent to start putting away money for further education as soon as you can. One of the best things about the future is that it comes only one day at a time, which means we can slowly save over the course of many years.
Shortly after my kids were born we opened up a NY 529 College Saving Program Direct Plan. A 529 plan is a tax-advantaged savings plan that encourages families to save for college. I love the NY 529 Direct Plan specifically because the fees are unusually low, there is no minimum contribution and it’s easy to join and manage your account online. With the NY 529 Direct Plan, we can set aside money for college now, while reducing the need for student loans and the number of students who are drowning in debt after graduating. By simply contributing to your child’s NY 529 Direct Plan regularly, you can avoid potentially burdensome student loans and the overall cost of college would also be lower because you wouldn’t need to borrow money. Friends and family members can also easily contribute to your NY 529 Direct Plan online as gifts.
You can use the funds from the NY 529 Direct Plan at thousands of colleges, in addition to many graduate, vocational and technical schools. But rest assured, even if you decide not to use it for higher education, the money will always be available to you. Visit www.nysaves.org/blastoff to learn more about how you can start saving for college. And remember, an investment in your children always pays the best interest!
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.
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.
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.
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.
© 2020 New York’s 529 College Savings Program Direct Plan