BLAST OFF WITH NY’S 529 COLLEGE SAVINGS PROGRAM DIRECT PLAN

This post is sponsored by BabbleBoxx.com and contains information on the New York’s 529 College Savings Program Direct Plan. The content and opinions expressed in this post are my own.

2020 was definitely a different and challenging year, but one thing that I’ve taken out of it is that you never know what the future holds, and planning is so important especially with young children.

The old cliché of “the days are long, but the years are short” rings so true as a parent. Time certainly does go quickly, and I feel like the last 6 years have gone in a blink of an eye. Being hands on with our children’s learning is of the utmost importance to us, whether that is through reading, nature, physical activity outside, or little STEM projects. It sure has been fun to see our boys mature over the last few years as they start to begin their journey in education.

Watching them thrive in interactive projects through school and home has been so rewarding. Their personalities, interests and strengths are starting to show and we can’t help but talk about the future and how they’ll change the world some day!

My husband and I enjoyed learning about NY’s 529 College Savings Program Direct Plan while working on some fun science projects with the boys. It was perfect timing for the boys to gear up for school, and for us to educate ourselves on prioritizing saving for their futures. Education & knowledge is power, and It’s never too late or early to start saving, although now is better than later!

My oldest son loves to play soccer and already talks about becoming a professional soccer player. We’ve already booked our flights to see him play at Manchester United in 15 years, but in case that doesn’t pan out (haha!) he is interested in joining the family business. We know that preparing for not only his education, but his 2 younger brothers, is going to be crucial in seeing continued success of our family business of over 150 + years.

So, what is the NY 529 Direct Plan?

In a nutshell, 529 plans are investment accounts that help families save for college because they’re federal tax-advantaged.* Many states, like New York, offer state tax benefits too. (Talk to a tax advisor about your particular situation.) New York’s 529 Direct Plan has several advantages compared to other state 529s. Fees are unusually low, there is no minimum contribution, and it’s easy to join and manage your account online.

As a parent, I know one of my goals is to set my children up with a head start as best as I can. The NY 529 Direct Plan helps families save in order to avoid years of student loan debt. The more you can put aside for college now, the fewer loans you and your child may have to take out later on. Also, finding New York programs with tax benefits is always a plus.

My middle son is almost 4, and changes his mind weekly on what he wants to be “when he grows up,” but I know that by having the foresight to plan now we can help facilitate whatever goals and dreams he may have for the future by being proactive with our financial planning now.

I was impressed to see that the NY 529 Direct Plan savings can be used at thousands of colleges, as well as graduate, vocational and technical schools. And do not worry, they are not ‘use or lose.’ If the student doesn’t need the savings, family members can use them, or account proceeds may be used for non-qualified expenses, but taxes and a penalty will apply to the amount withdrawn!*

I love how friends and family members can also make easy online contributions as gifts as well. This is a great option for graduations, birthdays, etc. Even if you only have a small amount to save right now, NY 529 puts the power of time on your side.

Learn more at NYsaves.org/blastoff

Disclaimer /Disclosure:

* 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.

No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, Inc., Ascensus Broker Dealer Services, LLC, nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio.

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.