By Rachel Biar, Assistant State Treasurer, Nebraska, NEST 529 College Savings Plans
February 14, 2019
Love is in the air! What could be as sweet as a holiday dedicated to celebrating affection? As Valentine’s Day approaches, I am reminded of the relationships in my life that mean the most, and the importance of ensuring my loved ones are prepared for the future.
Though sharing roses and boxes of chocolates may be the typical gifts, consider showing you care this Valentine’s Day by contributing to your loved one’s 529 college savings plan instead.
With so many of life’s daily tasks to keep track of, taking measures to make life easier can make a big difference—especially when it comes to growing your college savings. If you haven’t already, set up automatic contributions to your 529 account. These funds can be transferred directly from your personal bank account or monthly paycheck, without straining your long list of to-dos. To take it a step further, increase the dollar amount over time for a seamless way to further jumpstart your savings.
In addition to the tax benefits of a potential income tax reduction and tax-deferred account growth, account owners benefit with compounded, tax-deferred growth, or growth on growth. When no taxes are owed on account earnings, compounding happens more efficiently to help grow your account value. When you consider automatic contributions, and how they compound over time, your account has the greatest opportunity to maximize its earnings potential because of market growth.
There are also many other ways you can grow your savings with just a little extra love—like making a habit of checking out your plan’s website for incentives or the chance to enter and win any contests you may be eligible for.
As you can see, several options are available to help set your child up for a successful financial future. From reoccurring contributions to scholarships, each extra dose of love can make a big impact. What better way to share the love this Valentine’s Day?
Rachel Biar is the Assistant State Treasurer, Nebraska, NEST 529 College Savings Plans