Saving for higher education and career training can be a daunting task, but a 529 savings plan can help make it easier. This education savings account that allows you to save for higher education expenses on a tax-advantaged basis. Wisconsin’s 529 plan is known as EdVest. In this article, we’ll explore five things to know about 529 savings plans and what you can teach your kids about them.
Tax Benefits: Contributions to a 529 savings plan grow tax-free, and withdrawals are also tax-free when used for qualified higher education expenses. This can lead to significant tax savings over time.
Flexible Use of Funds: Funds in a 529 savings plan can be used for a variety of qualified higher education expenses, including tuition, room and board, textbooks, and computers. In addition, some K-12 expenses may also be covered by a 529 savings plan.
No Income Restrictions: Anyone can contribute to a 529 savings plan, regardless of income. This makes it a great option for families of all income levels.
Low Minimum Contribution Requirements: 529 savings plans have low minimum contribution requirements, making it easy to start saving for your child’s education.
Investment Options: 529 savings plans offer a variety of investment options, including age-based portfolios and individual fund portfolios. This allows you to choose an investment strategy that aligns with your financial goals and risk tolerance.
To learn more, check out these popular resources from EdVest>>
What to Teach Your Kids
It’s never too early to start teaching your kids about the importance of saving for higher education or career training. Here are some things you can teach your kids about 529 savings plans such as EdVest:
1) The Importance of Education: Explain to your kids why higher education is important and how it can help them achieve their future goals.
2) The Power of Saving: Teach your kids the importance of saving and how even small contributions can add up over time.
3) Encourage Them to Save: Encourage your kids to save their own money for higher education expenses and match their contributions to a 529 savings plan.
4) Teach Them About Investing: As your kids get older, teach them about investing and how to choose an investment strategy that aligns with their financial goals and risk tolerance.
5) Make it Fun: Saving for college doesn’t have to be boring. Make it fun by setting goals, tracking progress, and celebrating milestones along the way. Edvest has a tool to help families get a quick estimate of approximately how much you’ll need to save using the Edvest Estimate Savings Calculator Tool.
In conclusion, 529 savings plans are a great option for families looking to save for higher education expenses on a tax-advantaged basis. By understanding the benefits of 529 savings plans and teaching your kids about the importance of higher education and saving, you can set them up for a successful future.
Learn more about Wisconsin’s 529 plan, Edvest.
During the week of April 15-21, 2023, Bank On Greater Milwaukee joins the Governor’s Council on Financial Literacy and Capability and the WI Department of Financial Institutions (DFI) in celebrating Money Smart Week, a financial literacy awareness and education campaign (learn more here). We’re featuring posts with tips and resources on teaching kids about money, certified accounts, debt relief, employer retirement plans, and 529 savings plan.
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