It’s Memorial Day, for all my US readers (if you’re not in the US, find out more about the day here). But it’s also May 29th, and that means it’s 529 day! 5/29 – get it! Great pun, 529 companies.
Today I have a great post lined up specifically for 529 day, and I’ll also share some great college savings posts from my past.
First, though, what is a 529 plan? It’s a plan that’s aptly named after after section 529 of the US Internal Revenue Service code where these types of plans were authorized. They allow you to accumulate money for college expenses for anyone (child or not). What’s so great about them? Well, in some states you can get an immediate credit on your taxes for the contribution. The great part is that your contributions will grow tax-deferred, and when it’s time to open the wallet and shell out for college, your payments will be tax-free.
That’s right, even if you have thousands upon thousands of dollars in earnings – you won’t pay any taxes. This is where saving early and often will help you – the longer your money stays invested, the more opportunity it has to grow, and the more of a tax benefit you’ll get. It’s like a bonus for starting early!
There’s a lot of confusion out there around 529 plans, so today I’m going to go through three amazing things with you in honor of the day:
- A 529 Q&A with the best financial minds around
- Some 529 little known facts, tips and tricks – brought to you by more amazing financial minds
- An awesome 529 giveaway guide – win something this 529 day!
Interested in learning more about my college saving strategy – what I call my College Compact? I’m targeting fully funding four years at my state’s flagship college (tuition, room, board, books, and supplies) for all three of my boys. I’ve set restrictions on what I will and won’t pay for, and what can be done with any leftover funds. It’s the Investment Policy Statement for college planning! Stop by here for all the details on how to create your own. If you do create a College Compact, drop me a note at firstname.lastname@example.org to share what’s in it!
Or perhaps you want to give a gift of a 529 plan or contribution to honor this day? Check out my ultimate 529 gifting guide – created for Christmas, but it works any time of year!
529 Q&A With The Best Financial Minds
What are the best strategies for conquering college expenses?
High Income Parent shares:
One thing people forget is that 529 plans count against financial aid by reducting the amount by 5.64% of the total 529 account value if the parent or student own the plan on the FAFSA. It doesn’t could if a grandparent or other non parent owns the plan. Also distributions count as untaxed income for the beneficiary and can reduce the next years financial aid potential. If possible it’s better to backload 529 payments over the last two years of college if financial aid is a concern. More strategies can be found in this article on 160 strategies to conquer college expenses.
Is it always best to save in my states plan if I get a tax deduction?
Mama Fish Saves says No – it’s not always the best choice. The immediate tax deduction might be nice, but Saving for College has done a study that indicates the savings is minimal. Interested in learning more, and seeing if your state is one where it makes sense to use the in-state plan? Check out her article here.
Is there a penalty for contributing to a 529?
Living Rich Cheaply answers this one:
I’ve heard from a couple of people that they decided NOT to fund a 529 plan because they heard that having it would negatively affect financial aid. While having a 529 plan will have an affect, it will only reduces need-based aid by a maximum of 5.64 percent of the parents’ asset value. Income is much more a factor when calculating financial aid. Having grandparents fund the 529 plan avoids the asset from being counted, however, a distribution from that plan will count as the student’s income. The rule has recently changed where it will not count as income for 2 years so having a grandparent fund the 529 plan might be helpful if you time the distribution right. More can be found at this article.
What if my child doesn’t want to go to college or gets a scholarship – am I out of luck and have to pay the penalty?
Physician on FIRE’s response:
If your children don’t use any or all that you’ve saved in a 529, you’ve got a number of options.
- Use the money for a relative’s education (cousin, nephew, another child)
- Leave it in the account for another 2 or 3 decades of tax-free growth to be used for potential future grandchildren
- Fund some education of your own. Cooking school in France or Italy is frequently mentioned.
If your child receives a scholarship for tuition, you can withdraw 529 contributions (but not earnings) tax-free and penalty-free up to the value of the scholarship.
How can I save for college when I don’t know what it will cost?
I’ll tackle this one:
Create a college compact with your kids. This is the investment policy statement for college savings, where you outline specifically what you will pay for, what you won’t pay for, what will be done with any leftover money, and what happens if your kids want to go to a more expensive school. Outline this when your kids are young, and revisit once per year as your circumstances change. Learn more by clicking the link above – if this is the one thing you do all year, you’ll be set for college.
529 Little Known Facts, Tips and Tricks
- Superfunding: Mrs. Bita from Bayalis Is The Answer explains that you don’t need to fund a 529 slowly – you can superfund it, giving your money more time to compound
- Rollover: Laura from Savvy Family Finance from learned from Joe at Retire by 40 that in her state she can rollover 529 funds to another plan w/o recapture penalties (not all states allow this). She shared Joe’s article, which you can find here.
- Oversaving: ESI Money warns that you can oversave in a 529 – and advises what to do in this article
- Don’t Stress: Wall Street Physician advises not to worry too much about selecting the absolute perfect option. “Don’t stress too much about picking the perfect state plan. The lowest cost plan today may not be the lowest cost plan tomorrow – 529 plans are competing for parents’ dollars just as hard as the index fund companies are competing for investors’ money. Expenses are getting slashed left and right, to our benefit.”
- It will be costly-plan accordingly: Making your Money Matter says ” I think a lot of people aren’t aware of exactly how expensive it’s going to be to pay for college in the future, and the 529 plan is a great vehicle to save.” So true! If you want to explore the topic more in-depth, check out her amazing College Savings Essentials free mini-class.
- Simplify: Monkey Free Me advises that simplicity is the way to go. They started funding a 529 when their child was born, kept contributing over time, and now at 12 they’re doing great.
- Gifting: Bill from Famzoo says “Check out GiftOfCollege (a gift registry for 529 college savings plans and student loan accounts that lets friends, family and companies contribute online and with GiftofCollege retail Gift Cards). I’ve met Wayne, the Founder/CEO, and have been impressed with his mission, execution, and determination.
529 Giveaways and Events 2017 – Your Ultimate Guide
So here’s the fun part – gifts and giveaways from 529 plans from across the country! Be sure to check out if your state is listed. I used a combination of Saving for College as the source for some of this information, an email my friend Brian over at Debt Discipline sent for some additional info, and my friend good old Google. I have to say that I’m really proud of this list – I wasn’t able to find anything as comprehensive online!
So without further ado, here you go:
Alabama College Counts 529 Giveaway!
- To help celebrate “5-29 Day” (May 29) CollegeCounts is giving away 31 college savings accounts ($529 each) to help you invest in what’s next. The beneficiary (your new little one) must be born between May 1-31, 2017. Account holder (that’s you) must be an Alabama resident.
- 31 CollegeCounts accounts with a beginning balance of $529 will be awarded to randomly selected winners.
- The deadline to enter is 5:00 p.m. CST July 1, 2017. Winners will be randomly selected and contacted by July 14, 2017.
- More here!
California: ScholarShare 529 Day Match Promotion
- Families who open a new ScholarShare 529 account will receive a matching deposit of $50 to be contributed and invested when the account is open.
- Accounts must be opened between Wednesday, May 24 and Friday May 26, 2017 with a minimum deposit of $50 and sign up for $25 Automatic Contribution Plan for six months.
- For information on other 529 Day events sponsored by ScholarShare, click here.
Connecticut: New Account Giveaways and Baby Scholars!
- Specifically for 529 day, the state of Connecticut (my home state!) is giving away money if you open a new account. Open a CHET 529 account between May 24 and 26, 2017, with a minimum $100 deposit and enroll in the Automatic Contribution Plan at $25 each month for six months – and they willadd $50 to your account. More here
- Change your profile picture and use #CHET529Day on Facebook for a chance to win a 529 account contribution to a CHET college savings account
- The CHET Baby Scholars program provides up to $250 toward a newborn’s future college costs. Babies born in Connecticut, who are less than a year old, and adopted children, not later than the first anniversary of the adoption, are eligible for a CHET Baby Scholars grant in the amount of $100. The grant is given as a contribution into the child’s CHET account. Then, if an additional $150 is saved in the account by the time the child is four (or in the case of an adoption, by the fourth anniversary of the adoption), the account may be eligible for a second grant of $150.
Florida: 529 Savings Plan Scholarship Program
- You have a chance to win a $529 scholarship deposited into a Florida 529 Savings Account
- Open to Florida residents age 18 or older. 10 winners will be selected in a random drawing. Enter here – deadline: June 11, 2017
Georgia: Path2College 529 Plan Newborn Sweepstakes
- Enter for a chance to win $5,529 towards a Path2College (Georgia) 529 Plan
- Open to residents – or Path2College 529 Plan account owners – who are the parent, guardian or grandparent of a child born in a Georgia hospital during 2017.
- One winner will be selected to win $5,529, and will have the option to use all or a portion of the prize to open a Path2College Savings plan for the newborn.
- The hospital where the baby is born will also receive a $1,529 check.
- Enter here – deadline: April 14, 2018
Kansas K.I.D.S. Matching Grant Program
- The K.I.D.S. Matching Grant Program aids families living in Kansas with income less than 200% of the federal poverty level. Program participants also must be enrolled in the Learning Quest 529 Education Savings Program. You can open a college savings account with an initial investment of at least $25, or through recurring contributions of $25 a month (via payroll deduction or from your bank account). More here.
Kentucky Education Savings Plan Trust Newborn Giveaway
- Open to parents, grandparents, or guardians of babies born in Kentucky during the prior 12 months. One drawing will be held each calendar quarter, and the winner will receive a $529 KESPT college savings account. A total of four drawings will take place this year. Enter here – deadline is September 30, 2017.
Louisiana START 529 Giveaway!
- Open a new START 529 College Saving account by May 29 to be eligible for a drawing to win a $529.00 contribution to your account or one of several other great prizes. Open a new START Saving account between May 15 and midnight May 29 (5/29) and you’ll be entered into a drawing to win a $529.00 contribution to your account. Check out more here.
Maine Resident Grants!
- Grants for Maine Residents can really add up! Grants for opening an account and for making additional contributions are real investments in the future. If the account owner or the student (beneficiary) is a Maine resident, the NextGen account may be eligible for grants for Maine residents. More information here.
Massachusets 529 Event!
- On Tuesday, May 30th, Governor Charlie Baker will be reading to children at a Start U.Reading eventat Nevins Memorial Library in Methuen at 10:00 a.m. He’ll be joined by Winnie the Pooh. All families are welcome to come hear a story and learn more about saving for college. No registration is required. More about how MA celebrates 529 day can be found here.
Maryland ‘Zoo Keeper For A Day Giveaway’
- The Maryland Zoo will be having an entrance day of $5.29 and one child will win the ‘Zoo Keeper For a Day’ package to see care facilities. On May 29, 2017 the Zoo will host a “529 Day Celebration” and the first 500 children to enter the Zoo will pay a special price of only $5.29 for admission, almost $10 off the regular child’s admission, thanks to the folks at Maryland 529. Representatives of Maryland 529 will be onsite to answer questions about saving for college using their two flexible 529 plans. More here.
- To enter your child in the random drawing for the “Zookeeper for a Day” experience, a $529 Maryland College Investment Plan account and a free family membership to The Maryland Zoo, complete the online form at www.marylandzoo.org. Registration is open from now through June 23, 2017, and the drawing to select a winner will take place on June 26, 2017.
Missouri MOST 529 Giveaway!
- MOST is celebrating 529 College Savings Day®with a giveaway! Enter by May 31 for a chance to win $5,290 for higher education. Visit here to enter
Nebraska NEST ‘Birthday Babies’ Giveaway
- Enter to win a monthly drawing of a $529 contributions to a NEST 529 College Savings account. Prize winners must designate a newborn beneficiary of the savings account. Winners will be selected on 15th of reach month.Enter here – deadline is December 31, 2017
Nebraska NEST ‘Big Dreams $20K’ Giveaway
- Enter to win a drawing of a $5,000 contribution into a NEST 529 College Savings account. There will be four winners.Prize winners must designate a beneficiary 10 years old or younger. Enter here – Deadline is TODAY, May 29, 2017
My Nebraska Big Dreams $20K Giveaway
- NEST529 is giving away a $5,000 contribution into each of four NEST 529 College Savings accounts for a child 8 years old or younger. Entering is easy…Nebraska residents can fill out the entry form at www.NEST529.com/NebraskaDreams or send in an entry by October 16, 2017. Also new NEST529 account owners can gain an additional entry by using promo code “NebraskaDreams” when opening an account.
Nebraska: NEST on the Farm – Fun Photo $1,000 Drawing
- Nebraska residents can submit a fun farm photo of a child 13 years old or younger by June 30th, 2017, to be eligible for a drawing to win a NEST College Savings Plan contribution. There will be six winners! More here.
Nebraska: Kids Savings Program $25 Bonus
- After a child makes a deposit of $5 or more on each of five visits into his or her minor savings account (for a minimum total of $25), the child will be eligible to receive a $25 bonus into his or her NEST Direct College Savings Plan account. Official rules and instructions are here.
Nevada: $529 Scholarship Drawing
- Enter for a chance to win a $529 SSgA Upromise 529 Plan. This is open to Nevada residents with a child age 13 or younger. Five winners will be selected at random. Enter here – the deadline is May 31, 2017
New York 529 Day Giveaway!
- For a limited time the New York 529 College Savings Program Direct Plan is offering a chance to win a $500 contribution to a New York 529 Direct Plan account. Simply fill out this form online for your chance to win. No purchase necessary. One entry per person. See Official Rules for details. Visit here to enter! Deadline is May 31, 2017
Get up to $200 for a little one’s college fund. Here’s how:
- Already have a College SAVE account? Just complete the Children FIRST enrollment form.
- Haven’t opened a College SAVE account yet? Enroll online or download an enrollment kit. Be sure to check the Children FIRST box in section 8 of the enrollment form.
- Contribute at least $200 within the next 12 months for a dollar for dollar match. The Children FIRST contribution will be added to your College SAVE account for the child’s future education.
- Continue to add to the College SAVE account for the child’s future higher education costs at the pace that’s right for you.
Ohio: CollegeAdvantage 529 Day giveaway
- Enter to win one of five $529 CollegeAdvantage Direct Plan college savings awards to celebrate 529 Day and graduation season. The sweepstakes will run from May 22 to June 11. Enter here!
Oklahoma College Savings Plan Newborn Sweepstakes
- Enter for a chance to win $5,529 towards an Oklahoma College Savings Plan.
- Eligible participants include Oklahoma residents who have a child or grandchild born in 2016 at a participating Oklahoma hospital. One entrant will win the grand prize, and one prize of $1,529 will be awarded to the volunteer auxiliary at the Oklahoma hospital of the winning newborn. Enter here – deadline is April 14, 2018
Oregon College Savings Plan – Oregon Zoo Days Promotion
- Enter to win a household membership to the Oregon Zoo and a $1,000 Oregon College Savings Plan account. One drawing a month will take place during 2017 to award one zoo membership. One drawing will be held at the end of the year to award one $1,000 Oregon College Savings Plan Account. More information here
- Deadline: The last day of each month for the zoo membership drawing; June 30, 2017 for the account drawing.
Pennsylvania 529 Guaranteed Savings Plan Contest
- Win One (1) grand prize: $529 contribution to a Pennsylvania 529 Guaranteed Savings Plan account. More information here. Deadline is June 30th, 2017
Rhode Island College Bound Baby!
- Babies born or adopted as Rhode Island residents on or after July 1, 2010 are eligible to receive a one-time $100 grant within their first year of life, into a CollegeBound Saver account established for their benefit.
- This program helps local families to start saving for college, allowing them more time to grow their college savings. Learn more
South Carolina Future Scholar PalmettoBaby Program
- This year, Future Scholar is celebrating its 15th anniversary of helping families save for college. In recognition of this important milestone, the Office of State Treasurer Curtis Loftis, sponsor of South Carolina’s Future Scholar 529 College Savings Plan, is expanding the PalmettoBaby Program.
- For the 2017 PalmettoBaby Program, we are offering a $5,290 grant to all babies born in South Carolina on 5/29, 5/30 or 5/31/2017.
- Parents qualify by:
- Opening a new Future Scholar account. A $5,290 grant will be deposited in your new account.1
- Completing and signing forms by the deadline. All completed forms must be received by September 1, 2017.
Tennessee Investments Preparing Scholars (TIPS)
- TIPS is a matching grant program offering incentives to participate in the TNStars® College Savings 529 Program to Tennessee residents meeting certain household income requirements. When a qualifying family establishes a TNStars® account and enrolls a beneficiary in the TIPS program, the state will provide a 4-to-1 matching contribution. That’s $100 for every $25 contributed by the account holder. Beneficiaries can receive a maximum match of $500 per year for up to three years. More here
Vermont: Babies born on 5/29 will get money for college
- To be eligible, the child must be born in Vermont on 5/29/2017
- The $100 award will be deposited into a Vermont Higher Education Investment Plan, the state’s 529 college savings plan. Enter here!y
Vermont: Celebrate National 529 Day in May! And enter our $529 drawing
- Sign up during the month of May to be entered for a chance at a $529 deposit in a VHEIP account. You must be a Vermont resident OR be a VHEIP account owner, and sign up for the drawing. Enter here!
Virginia 529 Day Giveaway!
- Virginia 529 Day is Monday, May 29th, and you can start saving for a loved one’s higher education by May 31st with automatic contributions and be entered to win an extra $20,000 to you account. For more information you can call 1-888-567-0540 or visit here.
West Virginia SMART5.29K Run/Walk
- Not a giveaway, but a great cause. The SMART5.29K Run/Walk raises money to establish SMART529 College Savings Plans for children recently adopted out of the foster care system in West Virginia. All proceeds from the 5.29K registration, minus a $3.00 race fee, will be deposited into SMART529 College Savings Accounts. More information here!
I Want To Hear From You!
What are you doing this 529 day? Let me know in the comments! Remember, be sure to share this post using one of the sharing buttons to help spread the word on 529 day!
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