September is recognized as College Savings Month throughout the country. This entire month is dedicated to reminding families that saving for higher education is one of the best things they can do for their children’s future.
In Wisconsin, an average school year costs $6,571 for a public college and $26,102 for a private university*. As tuition and fees continue to rise annually, the worry of how to pay for your child’s post-secondary education comes fast.
Wisconsin’s Edvest 529 College Savings Plan is a tax-advantaged saving and investment plan that has helped families prepare for the future cost of higher education for more than 25 years.
Read on to learn about the top 9 reasons to start saving with Edvest, including its ease, where you can use the funds, and what benefits you’ll receive from a 529 plan.
Number 1: It’s Easy and Convenient with Edvest
Being a parent is time-consuming and saving for your little one’s higher education may be far from your thoughts.
Fortunately, with Edvest, you can easily open an account in just 15 minutes and conveniently manage it online or by mail. Making regular contributions is hassle-free when you set up recurring contributions from your bank account or through payroll direct deposit (if supported by your employer). And it can be in an amount that fits your budget.
And like any major financial goal, it’s easier to achieve over time. In fact, time is one of your most valuable assets when saving for college. Consider the fact that once your child is nine, half of your investment time has slipped by!
So, the earlier you open an account and start making regular contributions, the more opportunity your money has to benefit from compound earnings.
Number 2: Savings Can Grow More Due to Tax Advantages
Saving with a 529 plan in Wisconsin comes with unique tax advantages. Any earnings from Edvest are free from federal and state income tax when used for qualified expenses.
In addition, Edvest offers a state income tax deduction for Wisconsin taxpayers. The maximum deduction for the 2022 tax year is $3,560 per year, per beneficiary. And this applies to anyone who contributes, not just the account owner. Limitations apply.1
Number 3: You Can Use Funds at Eligible Schools Anywhere
When it comes time to embark on their higher education journey, your child may decide to study abroad or go to school across the country.
Funds saved with Edvest can be used at any accredited public or private university, college, technical college, community college, or professional school nationwide and many abroad, and toward the cost of apprenticeships. Additionally, up to $10,000 annually can be used toward K-12 school tuition per student from all 529 Plans.2
Number 4: Your 529 Plan Can Be Used For More Than Tuition
The first thing that may be top of mind is using your savings for tuition. While that’s a significant portion of expenses, funds can also be used for many qualified expenses, including:
- Room and board
- Computers and related technology
- Fees
- Books and supplies
Number 5: There Is Lower Impact on Financial Aid Compared to Other Savings Options
Many parents worry that a 529 account can adversely affect eligibility for financial aid. But worry not! So long as the parent is the account owner, funds are typically treated as belonging to the parent, not the child, minimizing the impact on financial aid.3
Plus, recent changes to the Free Application for Federal Student Aid (FAFSA) process mean that students will not be required to report any cash support they receive from grandparents – including funds received from a grandparent-owned 529 account – in the future.
Number 6: Edvest is Affordable
Parents, grandparents, or other family members can open an Edvest account with as little as $25 via ACH, payroll direct deposit, or check. And there are no application, sales, or maintenance fees.
In fact, Edvest is ranked the sixth lowest cost 529 college savings plan in the country.4 Lower fees help ensure families see more of their hard-earned dollars going toward their loved one’s education savings.
Number 7: Everyone Can Help!
Make saving for college a family affair by asking friends and family to contribute to your child’s 529 account. Gifting is perfect for birthdays and other special occasions. And with the holidays quickly approaching, encourage loved ones to ditch the latest toy or video game and give a gift that will last a lifetime.
You can also ask your student to contribute to their 529 account. Even a tiny amount of savings from monetary gifts or part-time jobs can create a shared sense of responsibility to fund their higher education.
Number 8: You Can Transfer Funds to Eligible Family Members
You might be worried about saving for college when you’re not even sure of your child’s path. And that makes sense!
Suppose it turns out your child doesn’t require all the funds saved, or their education goals change. In that case, you can designate a new beneficiary without penalties, so long as they’re an eligible family member.
Also, there is no age requirement for when your child must withdraw the funds– they can start whenever they’re ready.
Number 9: Investment Flexibility
Families have different financial circumstances, goals, and savings timelines.
That is why Edvest provides a variety of professionally managed investment portfolios to fit your needs. This includes enrollment year options that automatically adjust your asset allocations as your child approaches college age.
Start today. Save for tomorrow.
College Savings Month is the perfect time to add opening an Edvest account to your back-to-school shopping list.
Getting started, making consistent contributions, and giving time for your money to grow can make a big difference. Edvest makes it easy to start. Learn more at Edvest.com or attend one of our online webinars.
*Source: https://www.collegetuitioncompare.com/compare/tables/?state=WI
1To learn more about Wisconsin’s Edvest College Savings Plan, its investment objectives, tax benefits, risks and costs, 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. Consult your legal or tax professional for tax advice. If the funds aren’t used for qualified education higher expenses, a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributor and underwriter for Wisconsin’s Edvest College Savings Plan.
2Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school and registered apprenticeship programs, can be withdrawn free from federal and Wisconsin income tax. If you are not a Wisconsin taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances. Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act.
3The treatment of investments in a 529 savings plan varies by school. Assets are typically treated as the account holder’s and not the student’s. (Student assets are generally assessed at 20% whereas parental assets are generally assessed at 5.6%.) Any investments, including those in 529 accounts, may affect the student’s eligibility to get financial aid based on need. You should check with the schools you are considering regarding this issue.
4ISS Marketing Intelligence 529 College Savings Fee Analysis Q2 2022. Prior to the fee reduction, Edvest was the sixth lowest cost 529 college savings plan in the country. Edvest’s average annual asset-based fees were 0.16% for all portfolios compared to 0.52% for all 529 plans – more than three times lower than today’s national average for 529 plans.
