“An investment in knowledge pays the best interest.” -Benjamin Franklin
This holiday season, rather than spending time and money shopping for presents that may be quickly outgrown and cast aside, consider a gift that will be valuable and benefit your loved ones for a lifetime: an investment in a college savings plan.
Saving for college in a 529 plan as a child grows is a critical and effective savings tool for families wishing to ease the financial burden of college in the future.
For those looking to invest in a loved one’s education this holiday season, the College Savings Plans Network (CSPN) is offering the following tips:
- Do Your Homework: Find out if the gift recipient already has a 529 savings or prepaid tuition plan set up. If so, get the account details, check what gifting options the plan offers and contribute. If they don’t already have an account, consider opening an account for them. Anyone can set up an account for any recipient: grandparents, other relatives or family friends can all be account owners. Be sure to compare plans for different states to find the one that is right for you and the beneficiary.
- Time it Right: Gifts can be most valuable when contributed early in the recipient’s life, so they have more time to potentially grow. However, you may open or contribute to an account to save for the future education of an individual of any age.
- A Gift for the Gifter: The holiday season is a great time to contribute. Many states offer tax deductions to 529 plan contributors and/or account owners, which must be in by the end of the year.
- Even Small Gifts Help: Check the minimum contribution limits each plan has, as most plans have low minimum contribution requirements. A gift as modest as $15 or $25 a month can make a big difference in the long run. Also, if a few family members each contribute, that can make an even greater impact.
- Consider Yourself: If you’re looking for gifts to add to your own wish list, check your state’s 529 plan to learn about how to set up easy gifting and invite others to lend a hand.
The College Savings Plans Network (CSPN) is a national non-profit association and the leading objective source of information about Section 529 College Savings Plans and Prepaid Tuition Plans—popular, convenient and tax-advantaged ways to save for college.
An affiliate of the National Association of State Treasurers (NAST), CSPN brings together administrators of 529 savings and prepaid plans from across the country, as well as their private sector partners, to offer convenient tools and objective, unbiased information to help families make informed decisions about saving for college. For more information, visit the CSPN website at CollegeSavings.org; and follow CSPN on Twitter and Facebook.