529 Day a reminder to save now for an uncertain tomorrow
If the year 2020 taught us anything, it is that the one thing we can be sure of is that there’s nothing to be sure of. Good health, secure employment, even the guarantee of a next meal became worries for people who never experienced things like that before. We learned that much the same way we look both ways before crossing the street, we have to do everything we can to prepare for a secure future.
As Memorial Day weekend gets underway, we should all take time and celebrate May 29. Why 5/29? Section 529 of the internal revenue code allows for tax-advantaged education saving programs. Each year, May 29 is celebrated in the financial planning industry as a day to encourage saving for education and preparing for academic success.
The cost of a four-year public college has increased 225 percent over the last 30 years, according to the College Board. Each year, it becomes harder and harder for families to afford a quality education without setting themselves up years of student loan payments.
Thankfully, our office has a way to help. The DE529 Education Savings Plan provides a tax-advantaged program for Delawareans. Money from DE529 accounts can be used at almost all accredited colleges and universities nationwide and many vocational or technical schools for a wide range of qualified education costs. You won’t pay any taxes on your money as it grows; plus, withdrawals for qualified education expenses like tuition, fees, and books are federal and Delaware income tax-free.
DE529 boasts more than 22,000 active accounts and had a total of $53 million contributed to the plan last year. Also, new accounts grew by 24 percent in 2020 over 2019 in which Delawareans saved an average of $3,300 into the plan last year. Across the country, over 14.8 million 529 accounts have been opened and they have collectively saved over $425.2 billion. While saving for the entire cost of education may be daunting, every dollar saved is one more dollar that someone would not need to borrow, and that is a win.
Paying for education should not be an obstacle but, unfortunately, many times money is the largest hindrance to furthering one’s education. Contributions to DE529 accounts can be invested in portfolios tailored to a person’s age or the investor’s ability to identify an asset allocation strategy. There’s no minimum investment required, so you can put your Delaware 529 account into action immediately.
During this Memorial Day weekend, as we honor those who paid the ultimate price in the past, let’s invest in the heroes of our future…our children, by opening a DE529 account.