Santa Fe, NM, May 14, 2024 (GLOBE NEWSWIRE) -- May 29 is recognized as National 529 Education Savings Plan Day, a day devoted to raising awareness of tax-advantaged 529 plans, an option added to the tax code in 1996 that makes investing for future education more appealing. 529 Day encourages families to start planning for their loved ones’ future education needs. Recent data shows that due to rising college costs, families should save at least $2,000 more over a five-year period as compared to previous years. Starting to save early is key, and education-specific savings plans like 529 education savings plans can help families maximize their savings with tax benefits and tailored investment options designed specifically for paying educational expenses.
As of December 2023, over $471 billion dollars are currently being invested for education around the country in 16.4 million individual accounts according to the College Savings Plan Network.
"A 529 education savings plan is a powerful tool for families looking to save for future education," says Natalie Cordova, Executive Director of the New Mexico Education Trust Board, the organization that administers The Education Plan®, 529 education savings plan. "Not only do these plans provide tax advantages, such as tax-free growth and tax-free withdrawals for qualified expenses, but they also offer diverse investment options tailored to educational goals."
One of the key features of The Education Plan is its tax benefits. Contributions to an account with The Education Plan may be eligible for state tax deductions or credits, and earnings grow tax-free when used for qualified educational expenses. In honor of 529 Day, The Education Plan encourages families receiving tax refunds to consider investing the refund in a 529 education savings plan. By leveraging tax refunds in a 529 education savings plan, families can amplify their savings efforts and prepare effectively for future educational expenses.
529 plans can be used to pay expenses for education at colleges and universities, technical and community colleges, trade schools and many other post-secondary education programs. While state tax incentives vary, federally, money grows in a 529 account tax deferred and can be withdrawn tax-free if used for qualified expenses.
Research shows that with just $500 saved a child is three times more likely to attend college and four times more likely to graduate than those without savings. Funds invested in a 529 education savings plan can be used for a variety of qualified education expenses including tuition, room and board, books, supplies, and meal plans at eligible institutions nationwide. Funds may also be used to pay for K-12 tuition, apprenticeship expenses, and more. The Education Plan is a flexible education savings plan that accommodates different savings styles, and there is no minimum contribution required to get started.
"As families navigate the financial challenges of future education costs, starting to save early with a 529 education savings plan is a proactive step toward securing a brighter future for our children," adds Cordova. "By leveraging the benefits of The Education Plan, families can empower their children to pursue their educational dreams with less financial burden."
To learn more about The Education Plan®, visit TheEducationPlan.com.
