Jun 22, 2020
The very first episode of “College Savings Talk” provides a detailed breakdown of what 529 plans are, outlines their primary advantages and explains why they are an ideal investment vehicle to use for a family’s higher education savings.
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Intro - 00:00
Hello
and welcome to the first episode of our brand new podcast “College
Savings Talk” brought to you by Edvest 529, Wisconsin 529 College
Savings Plan. We created this podcast as a way to educate families
about saving for college and technical college, and to discuss
misconceptions about saving for higher education. While there are
other types of savings options, we're going to focus our discussion
on one of the more popular ways families prepare for the cost of
higher education - the aforementioned 529 plan.
What Are 529 Savings Plans? -
00:40
So,
let’s start at the beginning, “What exactly are 529 savings
plans?”
Think of them as retirement accounts but for college and technical college. With standard savings accounts funds have a tendency to just sit while they are at a rate of return. However, just like retirement accounts, the money placed in 529’s can actively work for you as funds are invested into portfolios made up of a mixture of stocks, bonds, and cash. Some 529’s even offer guaranteed rate options made up of annuities and money market accounts and just like with Roth IRA retirement accounts you contribute after-tax money. Any earnings are tax-deferred meaning the gains on your college savings will not be subject to taxes as long as the money is used for qualified education expenses like tuition, room and board, books, supplies, computers, and tablets.
Remember the old adage “every little bit helps,” well it really rings true with 529 plans.
Key Advantages - 01:50
Are
you intrigued by the potential for tax-deferred growth 529 plans
offer? Well, that's just one of six key 529 plan advantages. What
are the rest?
Tax Advantages - 02:04
Let's
start with the additional tax advantages to 529 plans. As
Wisconsin's official 529 College Savings Plan, Edvest offers a
state tax deduction for each child or student. Wisconsin also
offers state tax-free growth of any earnings and Wisconsin
employers may even qualify for a state tax credit based on their
contributions to employee Edvest accounts limitations apply. State
tax benefits vary by state, so please visit your home state's 529
plan website for more information.
Accessibility - 02:37
Accessibility
is another major benefit of investing in 529 plans. Anyone who is a
US citizen or resident alien and at least 18 years old and would
like to contribute on behalf of a beneficiary is eligible to create
or add funds to a 529 account. There are no income requirements or
limits and you can open any state's 529 plan regardless of where
you or your future student lives.
Flexible - 03:07
529
plans are also incredibly flexible. Funds can be used nationwide at
universities, colleges, technical colleges, grad schools,
professional schools, and even at many schools abroad. You don't
have to use 529 funds in the state where you live or even in the
state where the 529 plan is set up. This means you can reside in
Wisconsin, open an Edvest account, and your child or grandchild can
use the funds almost anywhere they wish to study. Saving with 529’s
can be a low-cost, high-value way to pay for college. Direct-sold
529 plans are available to families without sales charges and offer
access to professionally managed investment portfolios.
Ease-of-use - 03:55
Lastly,
a major advantage of 529 plans is ease of use. If you have $25 and
15 minutes you can start saving for college or technical college
with Edvest. You can set up automatic contributions from a bank
account or your paycheck. You can also deposit funds whenever you
like. You can even receive online account access to monitor your
account performance - now that is flexibility.
Conclusion - 04:24
Saving
for college can seem daunting but as you just heard 529 plans offer
six key advantages -making them a smart savings choice.
You can get started today by opening an Edvest 529 account or learn
more by visiting us online at Edvest.com. You may also speak with
an Edvest college savings representative, Monday through Friday, at
1-888-338-3789.
In subsequent episodes, we’ll explore when is the best time to begin saving, how much you can or should consider saving, and take a hard look at the facts of student loan debt.
Until next time!
Disclosures - 07:20
Wisconsin
taxpayers can qualify for a state tax deduction up to $3,860 for
each contributor per beneficiary per year from contributions made
into an Edvest 529 College Savings Plan.
To learn more about the Edvest 529 College Savings Plan, its investment objectives, risks, charges and expenses, please see the Plan Description at Edvest.com. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. If the funds aren't used for qualified higher education expenses, a 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Check with your home state to learn if it offers tax or other benefits such as financial aid, scholarship funds or protection from creditors for investing in its own 529 plan. Consult your legal or tax professional for tax advice.
TIAA-CREF Tuition Financing, Inc. (TFI), Plan Manager. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributor and underwriter for the Edvest 529 College Savings Plan.
FCM-2667578PR-Y0324X