Have you ever wondered how to set-up a college savings account for your child’s future? Do you even know where to go to set-up a college savings account for your child’s future?
Setting up a college savings account, also referred to as a 529 College Savings Account, is the foundation to building your child’s future. In as little as 15 minutes you can set-up a 529 College Savings account for your child.
With the price of college tuition increasing on what appears to be a daily basis, it’s no wonder parents are intimidated at the thought of even starting a college savings account for their children. And if a family has three or four children, or more, forget about it. Parents have enough to worry about with pandemics, vaccinations, childcare, finding a pediatrician, finding a good school, food allergies, insurance plans, can we afford ballet, can we afford little league, can we afford music lessons, what do we name the dog, the cat, the fish, are these new toys stimulating enough for my children, the list of things to worry about goes on and on.
With so many more immediate things to worry about, why would any parent even begin to think about college. Why think about college, which in most cases is about 18 years away from right now, when you can’t even make a decision on cloth versus disposable diapers? The truth of the matter is that college time will arrive in about 2-3 years. Now we all know that it’s really 18 years from now, but in parent time, things move along much quicker and before you know it your little pumpkin is heading out the door to college.
Setting up an Idaho 529 College savings account is about as easy as giving your little pumpkin a bath, in fact in most cases setting up the Idaho 529 account is even easier. Follow the simple steps listed below to get you, and your little pumpkin, all set up for college.
- Go to www.idsaves.org
- Click on the blue box in the top picture that says “Enroll Now”
For new account set-up, you will need the following information to get started:
- Information about “You” (your name, address, date of birth, social security number). You are the custodian for the account, the person in charge.
- Information of your successor (in case something happens to you). This can be your spouse, grandparent, aunt/uncle, etc.
- Information about your beneficiary (your child’s name, date of birth, social security number)
- Select the investments you want for your account (they provide a menu of different investments for you to choose from)
- Provide your bank information (account number, routing number, etc.) This will allow them to automatically withdraw a predetermined amount each month. This amount can be as little as $25 per month.
Once you have provided the necessary information, you can sit back and relax, after you change your little pumpkins diaper (cloth or disposable).
One of the nice benefits to using an Idaho 529 College Savings account is that so long as you or the beneficiary are an Idaho resident, you do not have to pay the $20 annual fee. Also, there are no commissions, no sales loads, and no sales charges associated with the 529 accounts. There are small fees associated with the actual investments you select, and those fees are listed within the “Investments Options” tab on the IDsaves.org website under “Portfolio Price and Performance”. By setting this account up yourself, you can also bypass paying additional fees to a financial adviser. Keeping the fees low allows for the account to grow at a quicker pace.
There are a number of benefits associated with the Idaho 529 College Savings account. Individual Idaho taxpayers can qualify for a state tax deduction of up to $6,000 per year ($12,000 if you are married & filing jointly) for your contributions. Your account can grow tax-deferred which means that your earnings will compound year after year without the nasty tax-man taking a chunk out of your account. You also pay no federal or state income taxes on your withdrawals when the money is used for a qualified education expense. Other benefits include things like allowing other family members (aunts, uncles, grandparents, etc.) to contribute to the account, using the account for most 2-year or 4-year colleges nationwide, graduate schools, technical schools, or for qualified K-12 tuition expenses of up to $10,000 per year for public, private, and or religious schools.
All of the above mentioned information, along with so much more, is readily available on the idsaves.org website. If you have any questions about setting up an account, selecting your investments, designating an account successor, or cloth versus disposable, please feel free to give us a call. We love kids, and we love helping our clients save money!