Thinking forward with the NY’s 529 College Saving Program Direct Plan

This post is sponsored by 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.

When your children are small the thought of them ever growing up seems like a lifetime away, but in reality it happens before we know it! Shortly after my son was born, my grandfather gave us a gift that will forever be remembered. It was a monetary gift to be used for college one day. My husband and I knew we wanted to open a saving’s plan for him and decided on NY’s 529 College Saving Program Direct Plan. I’m proud to say all three of our children also have a NY 529 Direct Plan now.

Let’s face it, when they are young there is no way to predict what our kids will want to do when they grow up. Sure, a common theme is I want to be an “Astronaut”, “Fireman”, or “Ballerina”. We all know children will choose their own paths one day and as parents it helps to be supportive and provide guidance to our future generation.

One way parents can provide support is to start early and open a NY 529 Direct Plan. There’s no minimum amount to get started and there are so many benefits. Typically 529 fees are low and there are both state* and federal** tax benefits for the saver. Student loan debt can be burdensome and having a NY 529 Direct Plan can help families start saving early! The more you put away now means the less you have to borrow down the road. It’s never too early to start saving!

My kids are still young and even though the days seem long, the years go by very fast! In fact, we recently celebrated 2 of our 3 kid’s birthdays and it’s just another reminder that time does not slow down. Granted, we do not know what our kids will want to do when they grow up, but we do know college is very important and a priority. We hope they will all be “The Change” that makes the future generations brighter and smarter and worker harder together. I’ve seen so many positive changes in my lifetime and I hope my kids will continue to see many more.

The NY 529 can be used at thousands of eligible colleges in all 50 states and abroad as well as graduate, vocational, and technical schools. If a student does not use all of the savings the account proceeds may be used for non-qualified expenses, but taxes and a penalty will apply to the amount withdrawn.* Check with your tax advisor for the details. Also, the NY 529 Direct Plan is easy to manage online and friends and family members can easily make contributions as gifts.

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* 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.

**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.

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 [] 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