Why You Need a NY 529 Plan

As a mother to a 19-month old, I have been on my husband’s case for us to go sit with a financial advisor to talk about the best way to save for our daughter’s college tuition. I then received an invite to attend a talk about the NY 529 Plan at the Craft Studio in NYC. I jumped at the opportunity to learn about this college savings plan that can be used for higher-education including two and four year schools, trade and vocational schools, postgraduate programs, tuition, books, supplies, expenses for the purchase of certain computer equipment, software, and computer-related services.

The 529 plans are not exclusive to NY, so if you live in another state, it could be sponsored by your state as well. If you live in NY, there are definitely benefits to opening the NY 529 Direct Plan. In all states, your earnings grow federally tax-deferred and qualified withdrawals are tax-free. In NY, you get tax deductions as well.  The beauty of the plan is anyone can set one up, so if grandparents would like to open an account, they would be the account holder and name their grandchild the beneficiary. Only a very small portion of your investment counts towards any financial aid applications, so don’t let that deter you from saving. The account owner, not the beneficiary, is always in control of the account, even when the beneficiary becomes an adult. There are twenty types of investments from which to choose, depending on how aggressive or conservative you’d like to be. Because it goes based on age, you can start off more aggressively and then as it gets closer to college time, slow down the risk to hold onto all of the profits you’ve made on your investment.

For all of those holiday and birthdays when everyone asks you what your child wants, you can give them the link to their college fund account! You’ll be thankful for less toy clutter and your  child will be thankful when they don’t have student loans to pay back! I also think it’s a great idea to add to a baby registry. Some may think it’s too soon and they’d rather buy you a swaddle, but it’s easy for them to do and a way to help with the new baby’s educational future.  You can click here for more information.

Disclaimer: Compensation was provided by NY 529 Direct via Momtrends. The opinions expressed herein are those of the author and are not indicative of the opinions of NY 529 Direct or Momtrends.

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