Thinking Forward with NY’s 529 College Savings Program

This post is sponsored by BabbleBoxx.com and contains information on the New York’s 529 College Savings Program Direct Plan. The content and opinions expressed in this post are my own.

With three kids who are growing up so fast… where is their pause button!… it’s safe to say that I’ve thought about their futures. Brycen, who’s going on 12, is still really loving soccer and has set high goals for himself! I love seeing him grow and try new things. This summer he took up graphic design and has been creating logos for all of his friends. Then there is Brinkley who is a gymnastics fanatic, artist extraordinaire and the best friend you’ll ever have. So loving and caring; I just can’t wait to see what life will bring her. And Brent… our baby! Always the baby in our family. He’s almost 5. And we can’t believe how quickly he is growing up.

So as we head “Back-to-School” (whatever that may look like!) the thought of what their education costs will be over the years pops into my head. Happy to say college is still years away but it’s never too late or too EARLY to start saving! That is why we started NY’s 529 College Saving Program Direct Plan accounts. I realized that saving for college now can reduce the burden of college debt later, for both us and our children. Have you thought about a college saving plan?

If I recall correctly, my husband and I had the talk about starting this account back when our oldest one was still in diapers. It took us a few years to actually take action and get his account active but I am so beyond happy that we did. It also made starting ones for our younger kids a no brainer. It’s sometimes hard to think about the future expenses and college when the kids are so young but it’s one of the best choices we made. Plus, they make it super simple with automatic transfers and payroll deductions.

Haven’t heard of New York’s 529 Direct Plan, yet? Don’t worry. I was there too. Luckily I am here to help answer some of your questions!

So New York’s 529 Direct Plan has been around for more than 20 years. The program as a whole is run by the state, in New York’s capital of Albany, but Vanguard provides the investment options. And most states like NY have state-sponsored and supervised 529 plans, which are investment saving plans designed to help parents save for college and other kinds of higher education like graduate programs. Typically, 529 have low fees, minimum investments are modest, and there can be both state and federal tax benefits for the saver.

I also learned that people from other states can and do join any state plan and can use the savings at any eligible school in 50 states and abroad. The 529 plans are investment accounts that help families save for college because they’re federal tax-deferred. Many states, like New York, offer state tax benefits too*. New York’s 529 Direct Plan has several advantages compared to other state 529s. The fees are low, there  are no minimum contributions, and it’s easy to join and manage your account online, which is great since we are all busy parents!

Saving now, rather than borrowing later,  makes the overall college cost much lower.  The NY 529 savings can be used at thousands of colleges, as well as graduate, vocational and technical schools like I mentioned. But the best part is that they are not ‘use or lose.’ Meaning if your child doesn’t need the savings, (wahoo!) then a family member can use them, or savers can take them back if some taxes are paid*. Which is a must! So even if what you have to save is a small amount, the 529 puts time on your side and gives you real tax advantages now, and flexibility later*.

MOM (or Dad!) TIP: Something we’ve done over the years is ask friends and relatives to make gift contributions!

I know this is a lot of information but hopefully I helped make saving for our little dreamers a bit easier! Because hey, you never know what our children will want to be in the future! Learn all the details at NYsaves.org/blastoff

Have a question? Comment below!

DISCLOSURES 

*Earnings on federal nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements. Please consult your tax advisor about your particular situation. 

** Contributions of up to $10,000 are deductible annually from New York State taxable income for married couples filing jointly; single taxpayers can deduct up to $5,000 annually. New York State tax deductions may be subject to recapture in certain circumstances such as rollovers to another state's 529 plan, federal nonqualified withdrawals, or withdrawals used to pay elementary or secondary school tuition, registered apprenticeship program expenses, or qualified education loan repayments as described in the Disclosure Booklet and Tuition Savings Agreement. State tax benefits for non-resident New York taxpayers may vary. Please consult your tax advisor about your particular situation. 

Investment returns are not guaranteed, and you could lose money by investing in the Direct Plan.  

For more information about New York's 529 College Savings Program Direct Plan, download a Disclosure Booklet and Tuition Savings Agreement [nysaves.org] or request one by calling 877-NYSAVES (877-697-2837). This document includes investment objectives, risks, charges, expenses, and other information. You should read and consider them carefully before investing.  

Before you invest, consider whether your or the beneficiary's home state offers any state tax or other benefits that are only available for investments in that state's 529 plan. Other state benefits may include financial aid, scholarship funds, and protection from creditors.  

The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the Program Administrators and are responsible for implementing and administering the Direct Plan.  

Ascensus Broker Dealer Services, LLC, serves as Program Manager and, in connection with its affiliates, provides recordkeeping and administrative support services and is responsible for day-to-day operations of the Direct Plan. The Vanguard Group, Inc., serves as the Investment Manager. Vanguard Marketing Corporation provides marketing and distribution services to the Direct Plan.  

No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, Inc., Ascensus Broker Dealer Services, LLC, nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio.  

New York's 529 College Savings Program currently includes two separate 529 plans. The Direct Plan is sold directly by the Program. You may also participate in the Advisor-Guided Plan, which is sold exclusively through financial advisors and has different investment options and higher fees and expenses as well as financial advisor compensation. 

© 2021 New York’s 529 College Savings Program Direct Plan