Skip to main content

529 Savings Plan

August 24, 2022 With the start of school just around the corner, it has our family thinking future educational costs -albeit quite a way out into the future.Back when we were expecting our first child, we had a conversation about how we thought we would handle educational expenses for our children. At that time, we both knew we wanted to put something in place related to a college savings plan, but really didn’t have a good understanding of what our options were or how to determine what amount we should be targeting. As life happened, with all the excitement and last-minute preparations for your first child – and college savings seeming so far off, we ended up putting it on the back burner and forgetting until right around her first birthday (which also roughly coincides with the start of back-to-school ads and reminders).We decided we needed to get serious, not wanting to lose another year of investment potential. Since I work for the State of WI, choosing Edvest (which is one of WI’s 529 plans) was a no-brainer since it is easy for me to manage contributions directly from my paycheck. The good news is that Edvest is typically ranked as one of the better 529 plans in the nation. We then spent time going through a few tools available online, including Edvest’s college savings calculator. This helped us balance determining what we felt comfortable setting aside and understanding what that figure would likely amount to once our daughter reached college age.When we had our second child, we ended up increasing our contribution into the initial 529 account that we set up, since our children are likely to have limited or no overlap for their post-secondary education, so we can change the beneficiary of the account rather than having to open a separate account.Their tax benefits, low annual fees, and relative flexibility of what qualified withdrawals are what drew us towards a 529 plan as a vehicle for college savings (in addition to the ease of contribution). One of the ancillary benefits of the plan is the availability for state income tax deductions for anyone who makes contributions (grandparents, aunts/uncles – not just the account owner) up to the annual maximum deduction ($3,560 per beneficiary for 2022).With the start of school serving as our annual mid-year reminder to check into our 529 plan, now behind us, and a comfort level for us going into end of the year and tax season. You might also be interested in As the year comes to a close, so does Season 14 of Project Money. In preparation for writing our final blog post we reflected over what has occurred over... In the last week we had to take Robin’s car, a 2019 VW Atlas, in for a couple of recall notices we had received. Nothing completely out of the ordinary... One of the topics we had mentioned in our posts from earlier this year was an employee stock purchase plan offered by Robin’s employer. We have never participated... Being part of Project Money has pushed our family to take a more active role in managing our finances, necessitating weekly conversations that have spurred... With Thanksgiving behind us, the countdown to Christmas has “officially” begin. This year, as part of our Project Money journey, we have been planning... I had been putting this off for a few weeks/months now, optimistic that Fall might stretch on a little bit longer – but this past week’s winter weather... Over the last few weeks, we have been working to refocus, and get back to some of the basics as we start to head into the end of year holiday season... Over the past few weeks and months, I had seen several news reports about I Bonds, usually with a corresponding endorsement of their attractiveness as... We have reached the point of the year where we have one foot firmly planted into heating season and thought we would reflect on what energy saving tips...