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Missouri Ag News Headlines |
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Parents Encouraged to Think About College Savings on '529 Day'
Missouri Ag Connection - 05/26/2017
May 29 is recognized as National 529 College Savings Plan Day. The purpose of "529 Day" is to raise awareness about college savings plans and how saving early in a child's life can be beneficial in the future.
Contributions and investment earnings in a 529 plan are tax-free as long as the funds are used for qualified educational expenses. Financial experts at the University of Missouri encourage parents to create a college savings plan early to help children complete
college with a minimal amount of debt.
"Investing in a 529 plan is an easy way to reduce one's tax liability while at the same time making an important investment in your loved one's future," said Andrew Zumwalt, an assistant extension professor for financial planning within personal financial planning, a
part of the College of Human Environmental Sciences. "These 529 college savings plans provide an excellent opportunity for parents to save early to help offset all of the costs of higher education, including room and board."
According to the College Board, the projected cost to attend one year at a four-year public university could be as high as $54,232 by 2032, the year that children born in 2014 will be turning 18. Rising college costs have led all 50 states and the District of
Columbia to take initiatives that help families financially prepare for college, including offering tax breaks for 529 plans.
"It is never too early to begin saving for college," said Nick Prewett, director of financial aid at the University of Missouri and board member of the National Association of Student Financial Aid Administrators. "Not only are 529 plans a simple way to save, but
doing so will help students decrease their future student debt levels."
In order to set up a 529 account, parents, relatives or caregivers must provide their personal social security number and birth date as well as information about the beneficiary. Upon setting up the account, participants can select investment options and payment
methods. Setting up an account only takes about 10 minutes. Individuals can use money in a 529 account to pay for tuition, fees, books, housing, transportation and other living expenses while in college.
Zumwalt and Prewett also suggest that 529 plans provide an opportunity for parents to teach their children about college savings and that the accounts can provide opportunities for children to contribute to their college savings
For more information about Missouri's 529 college savings plan, please visit: https://www.missourimost.org/.
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