Santa Fe, NM, April 02, 2024 (GLOBE NEWSWIRE) -- With tax season in full swing and Tax Day on April 15 quickly approaching, many people are anticipating tax refunds. To date, the average federal tax refund for 2024 is approximately $3,145, according to CNBC. For those looking to make a meaningful investment in their future, reserving some or all of the funding from their tax refund for a 529 education savings plan provides numerous benefits.
“With inflation and prices rising on many items, including college tuition, now is a great time to save for tomorrow,” said Natalie Cordova, Executive Director of the New Mexico Education Trust Board, the organization that oversees The Education Plan®. “Deciding to invest funds, like those received from a tax refund, in a 529 savings plan can pay dividends well into the future.”
Any amount saved can have a significant influence on a student’s future success, as students with as little as $500 saved for college are more likely to attend and graduate college. The Education Plan® allows families to start a 529 plan with no minimum initial investment and compounding interest can significantly boost savings over time in a 529 plan, especially when contributions are made early on. In a hypothetical example, a family investing just $150 per year into a 529 plan can potentially earn around $10,000 more over 18 years, compared to a traditional savings account.
“When able, commit to saving money for the future,” added Cordova. “One of the best ways to ensure future financial success is by saving for education, which in turn can pave a path to higher salaries and greater upward mobility in one’s career.”
As college costs and related expenses continue to rise, 529 plans offer a comprehensive solution to avoid the burden of student loans. With the average annual cost of a college education nearing $30,000, according to CollegeBoard 2023, a 529 plan serves as a valuable resource for families seeking ways to mitigate the financial burden of higher education.
Investing in a 529 plan not only helps families prepare for future education expenses, but also offers significant tax benefits. Many states provide deductions on state income tax for contributions made to a 529 plan. Additionally, funds invested in the plan grow tax-free, and funds withdrawn to cover qualified education expenses are tax-free.
To learn more about The Education Plan®, visit TheEducationPlan.com
