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I met my husband while I was still in college; he was fresh out of college and, naturally, a lot of our conversations revolved around our college experience. We both worked full-time while attending full-time college, and we didn’t get the chance to take advantage of experiences like study abroad programs, internships, or even to network on campus. Of course when we became parents, we wanted our children to have options we didn’t have. So, we started a NY 529 Plan for our oldest when she was only a few months old and began making contributions at every pay period. It’s one of our ways of supporting our children’s dreams. Over the last few months that we’ve been quarantined and spending more time together, we’re learning more about their dreams of becoming a filmmaker and scientist (at least for now) and want to encourage them in every way we can.
WHY WE CHOSE A NY 529 PLAN.
The NY 529 was the best option for our family for many reasons, as we learned when we did our research. First, it’s tax-deductible forus NY state taxpayers, so we can deduct contributions of up to $10,000 annually from New York state taxable income for married couples filing jointly and $5,000 for single taxpayers.* It was the best option for us to save for not one, not two, but three kids’ college education and we found it simple to get started.
NY 529 PLAN IS FLEXIBLE.
The NY 529 Plan is flexible; you can save as much or as little as you want, and if your income is ever affected like many of our friends and family are experiencing now, you can make lower contributions than usual. For instance, you can set aside as little as $10 or $20 per week, which can still add up over time.
PREPARED FOR THE UNKNOWN.
None of us could have predicted a global pandemic in 2020, and there is the possibility that other events would occur that may impact our finances in the future and our ability to save for our kids’ higher education. Having an NY 529 Plan means that we can worry a little less, knowing that we’ve prepared for the future.
ELIGIBLE INSTITUTIONS SPAN MORE THAN 4-YEAR COLLEGES.
My kids are only 10, 7, and 3 right now, so their interests may change as they grow older. A NY 529 Plan can be used to pay for any eligible higher learning institution, not just 4-year colleges. That means you can use it to pay for a graduate degree, community college, or a trade/vocational school. Whatever your child dreams of, you can support it.
SAVING OVER BORROWING.
We’re the generation crushed by student loans, so we know how stressful it can be. That’s why we wanted to start saving early and focus on saving versus borrowing to pay for higher education.
Thanks to the NY 529 Plan, we’re grateful that we’re able to give our kids the opportunities we didn’t have when we entered college. Like most parents, we want to give our kids the best shot at achieving their goals, and we’re glad that the NY 529 Plan allows us to do just that on our terms. I hope this helps your decision making if a NY 529 Plan would be right for your family. If you need more information, you can download a NY 529 Plan booklet here or call 877-NYSAVES (877-697-2837) to request one.
* 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 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.
©2020 New York’s 529 College Savings Program
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