New York's 529 College Savings Program

The importance of a college education cannot be underestimated. However, the cost of paying for one can put it out of reach for many families, especially those who haven't put money away throughout their child's life. Unless a family has a structured plan in place from the time their child is fairly young, it's hard to imagine them coming up with even one year's college tuition at the time it is needed, never mind enough money to pay for four year's of education.

So, now that you know how important it is to save for college all you have to do is figure out where to put your money. Your choice depends on how soon you will need the money. In her article Financing Your Child's College Education, About.com's Guide to Financial Planning, Deborah Fowles says, "the sooner you start investing for your child's education, the better." Ms. Fowles, in the same article, also offers this advice: "The only thing worse than not saving at all is putting your money in a passbook savings or money market account. In order to amass enough money to finance four years of college, you need to not only start early, but invest aggressively."

For more information on the investment options you should consider, please read Ms. Fowles article. One such option is a state college savings plan, also known as a 529. There are tax benefits of investing through such a plan, which makes it a very attractive choice. You can participate in New York's 529 College Savings Program Direct Plan. Here are some facts about the plan.

• There are 15 different investment options, including three that are based on the age of the beneficiary, and 12 individual portfolios. Participants may choose five of these options for each account.
• You can open an account with a minimum deposit of $25.
• An account's beneficiary can use the money to pay for tuition and related expenses at any eligible post-secondary school in the United States and abroad.
• Those who utilize NY's 529 receive the following tax benefits:
  • Assets grow tax-deferred and withdrawals are exempt from federal income tax when you use that money to pay for qualified higher education expenses.
  • There is a New York State income tax deduction (up to $5000 for individuals and up to $10,000 for married couples filing jointly).
  • There are also estate and gift tax benefits.
• Investments in NY's 529 are managed by The Vanguard Group.
• Join Upromise Rewards and link your Upromise Rewards account to your 529. Upromise allows you to earn rewards that can be used to pay for college.
• You can open a New York 529 College Savings Direct Plan, as well as maintain your account, online.

For more information please visit NYS's 529 College Savings Program online. Before making any investment, research each option thoroughly and, if necessary, consult with a financial professional.