With the April 15 tax deadline looming, many people are contemplating their financial situations and focusing on how to make the most of their money. One way to help do that is to start investing early for their children’s college education expenses through the Path2College 529 Plan, says the state Treasurer’s Office.
When planning for 2009 and beyond, one of the most important long-term investments to consider is a college education. According to a 2007 College Board study, Education Pays, a bachelor’s degree allows a person to earn over 60 percent more than with a high school diploma alone, or approximately $1 million over a lifetime.
“While 2009 will unfortunately present economic challenges for many, I want to encourage Tennessee families to continue to invest as much as possible for their children’s education,” said Tennessee State Treasurer David H. Lillard, Jr. “A college education is an invaluable resource that helps our children succeed, and it also helps our state and nation continue to be competitive in a global economy. By investing a small amount for your children today, you can give the priceless gift of education tomorrow.”
To help Tennessee families save for college, the State of Tennessee partnered with the Georgia last year to promote the Path2College 529 Plan to provide a competitive and proven way for Tennessee parents and grandparents to help save for college. The plan helps families prepare for the future costs of college tuition and other qualified expenses, such as certain room and board, books and fees, for colleges in Tennessee and nationwide. The plan is easy to use and understand, with no sign-up, maintenance or third-party sales fees, and accounts can be opened online with as little as $25, the Treasurer’s Office stated.
“Just like 401(k) accounts are designed to help folks save for retirement, 529 plans are designed to help them save for college,” said Lillard. “The Path2College 529 plan is flexible, makes saving easy and provides significant tax advantages.”
Any earnings in the Path2College 529 Plan are federal income tax-deferred and withdrawals can be used for tuition, certain room and board, books, fees and other qualified college expenses at virtually any college or university in the country. Withdrawals for these qualified expenses are also tax-free. The plan offers seven investment options, low annual asset-based fees, and participants can arrange for automatic contributions to their accounts to be drawn directly from a bank account or through payroll deduction.
"In these tough economic times it’s difficult for families to save" notes Chuck Penuel director of the Path2College 529 Plan, "but starting now can have short term and long-term financial benefits. The short term benefit is that any earnings in your account grow tax-deferred. In the long term, even putting away $25 a month can add up. With the ever-rising cost of college tuition and living expenses, it is important to start saving early."
The Path2College 529 Plan is managed by TIAA-CREF Tuition Financing, Inc., which is part of the TIAA-CREF group of companies. TIAA-CREF was founded by Andrew Carnegie and is one of the largest financial services firms in the U.S. with $363 billion in assets under management as of the end of 2008.
“TIAA-CREF, Tuition Financing, Inc is a good partner for Tennesseans to look to for college-savings planning and advice,” said Lillard. “Although many families are facing challenging circumstances and economic conditions that make college seem like a dream that might be difficult to achieve, if parents steadily invest a small amount over time, it is possible to help make the dream of college a reality for many more Tennessee children.”
Anyone can start a Path2College account for a beneficiary or contribute to a loved one’s account. Once an account is established, additional contributions can be made to the account through check or electronic funds transfer. You may contribute as little as $25 per investment option and you can establish convenient monthly, semi-monthly or quarterly contributions all year-round from your checking or savings account.
For more information on the Path2College 529 Plan, visit: www.path2college529.com or call (877) 424-4377.
Consider the investment objectives, risks, charges and expenses before investing in the Path2College 529 Plan. Please visit www.path2college529.com for a Disclosure Booklet containing this and other information.