Getting Started with 529 Plans
Saving for a loved one's college education is one of the most rewarding things you can do for their future. It can also be challenging if you don't know where or how to start. The College Savings Plans Network (CSPN) has designed this Web site to help guide you and get you started on the right path toward achieving your goals. You can find additional information about federal tax benefits for education by reading IRS Publication 970: Tax Benefits for Education
Start Saving for College
Define your savings goals.
The first step is to determine how much you want to save for your child's education. Do you want to save for tuition only or room and board, too? All four years of college or just two? Public or private college? Defining your goals will help you to establish how much you should save and measure your progress. Click on the College Cost Calculator to help get the information you'll need.
Start as early as possible.
The earlier you start saving the easier it is to save since you can afford to save in smaller amounts and you will have more time for your money to grow.
Save as much as you can afford.
Take a look at your budget and see how much you can dedicate toward saving for college. Even just $25 a month can add up over time. The key is to get started and gradually increase your monthly savings over time.
Use automatic transfers.
Take advantage of convenient ways to save such as payroll deduction or automatic transfers from your bank account.
Consider investing in a 529 plan.
There are many ways to save for college, but saving for college through a 529 college savings plan offers families unique benefits and opportunities. States often offer special benefits for residents such as state income tax deductions, matching grants, or scholarship opportunities.
Start Saving with a 529 Plan
529 plans are tax advantaged savings programs administered by states to encourage saving for higher education.
Step 1: Educate yourself.
If you're not sure what you are looking for, visit the 529 Classroom to learn more about college savings and 529 plans. A good place to start is the Common 529 Questions page.
Step 2: Consider your state's plan.
When choosing a 529 plan, you should always consider your home state plan first. States often offer tax benefits for residents, and sometimes also offer other benefits such as matching grants that would not be available by investing in another state's 529 plan. To view your state's 529 plan offerings, click on 529 Plans by State.
Step 3: Compare plans.
Many states offer their plans to non-residents. If your state plan does not offer the features you are looking for, you can choose to participate in another state's plan.
To compare program features and benefits from other states, click on 529 Comparison. The 529 comparison tool will help you review plans side by side to find a 529 plan that best meets your needs.The 529 comparison tool gives you two options for comparing plans: