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When considering your child’s future, you may ask yourself “How much should I save for my child’s future college expenses?” Although costs can be compared across colleges, this question comes down to personal preference. To help navigate through the options, Ohio's 529 Plan, CollegeAdvantage, has some guidance to help you select a savings goal that’s right for your family and your circumstances.

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Maybe you want to cover some of your child’s college expenses, like books or part of tuition. Maybe you would like to pay half of their tuition and room and board with your child covering the rest of the costs. Or maybe your goal is to cover nearly every college expense for your child.

Whichever scenario you choose, Ohio's 529 Plan offers useful tools to help set and meet your savings goal. If you need help determining how much to put aside each month, use our College Savings Estimator to receive personalized saving information. After inputting your college savings goals and examining your total projected costs, you will receive an estimated monthly amount needed to meet your savings objective. Please note, this is an example for illustrative purposes only. For additional advice, consult with your legal, financial, tax, or other advisor.

If you are still thinking of savings in Ohio's Direct 529 Plan, check out the Cost of Delaying Savings tool to see how waiting can affect the balance in your account. The earlier you start, the longer you can take advantage of compound interest. Are you looking at the investment options and are wondering what your risk tolerance is? We can help you determine it. Lastly, if you are currently saving money in a taxable savings account, rather than taking advantage of the tax-free growth in a 529 plan, we can show how the difference can affect the account balance.

If you’re already putting money aside in an Ohio 529 Plan, you can track your investment performance, see if you need to change your saving strategy as your child grows, or perform regular maintenance on your Ohio 529 account.

Outside of automatic recurring contributions, there are also many ways to add to your 529 account. You can contribute your tax return refund, and add your disappearing expenses (those costs that are in your family’s budget for a limited time span — like daycare) to the account. You can also join Upromise, in which your membership can earn you cash back on purchases you would typically buy.

Lastly, you don’t have to save on your own. Family and friends want to give meaningful gifts for the milestones in your child’s life. You can ask them to consider giving the gift of college by contributing to your child’s 529 plan in lieu of gifts for baby showers, birthdays, holidays, graduations, and many other special occasions. Through Ugift, you can set up a code which authorizes gift givers to donate online to your 529 plan without needing the actual account number. You’ll simply give a Ugift code to your family and friends. They can then visit Ugift529.com to make their electronic contribution securely from their bank account.

And as you save, don’t forget about another tax advantage of a 529 plan. If you are an Ohio taxpayer, contributions to CollegeAdvantage may be deducted from your Ohio taxable income in any amount up to $4,000 per year, per beneficiary, with unlimited carry forward. This means that $4,000 per year is not a contribution cap.  Should you choose to contribute more than $4,000 in a calendar year, any amounts above $4,000 may be deducted in future years, in increments up to $4,000 per year, until all contributions have been deducted. If you have accounts for each of your children, you receive the deduction to your Ohio taxable income for contributions made to each beneficiary’s account.

So, how much should you save for your child’s future college expenses? That is up to you. But CollegeAdvantage is here and ready to help you start.

The Ohio Tuition Trust Authority, the state agency that runs the Ohio's 529 Plan program, does not provide investment advice. The information contained herein is informational only and should not be relied upon exclusively to make your investment decisions. Investment options should be selected based on your investment goals, risk tolerance, and savings time horizon.

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529 Short Course: New Parents

5 things every new parent needs to know about saving for education

  1. Why Ohio 529?
    529s are specifically created for higher education savings. Unlike a traditional banking account, a 529 account benefits from tax-free earnings and tax-free withdrawals. For Ohio residents, there is also a state income tax deduction for those contributions.
  2. It’s simple to start.
    You can open your 529 account online in minutes with as little as $25. With ready-made portfolio options, you don’t have to be a financial expert to feel confident in your savings plan choices.
  3. Set it and forget it with automatic deposits.
    The sooner you start saving, the longer your account benefits from the Ohio 529 tax advantages as well as compound interest. Many new parents take their 529 contributions off their to-do list by setting up small automatic deposits from either their banking accounts or paycheck. Also, with our ReadySave 529 app, it’s also easy to track and adjust your account right on your mobile device.
  4. Save for college, career training, and more.
    Ohio 529 can be used at over 30,000 schools of all kinds, nationwide, including universities; community colleges; trade, technical, and vocational schools; certificate programs; and apprenticeships. Your Ohio 529 account can also pay for K-12 tuition at a public, private, or religious school. And, if it’s not needed for educational expenses, you can now roll over your 529 to a Roth IRA.
  5. Others can help.
    It’s easy for family and friends to contribute to your child’s account and receive tax benefits for themselves. You can share your account’s unique Ugift number with others to contribute online without creating their own 529 accounts. Those who live in Ohio will also receive a state income tax deduction for their contributions. Also, you can sign up to have reminder emails sent to you and loved ones for the big milestones in your child’s life.

Hoping to find gold at the end of the rainbow? If you are saving with Ohio 529 CollegeAdvantage, you have the benefit of Ugift with your account, which is savings gold.

Ugift makes it easy for others to give to your Ohio 529 account. With Ugift, you generate a unique code which allows loved ones to contribute to your Ohio 529 savings plan without needing the actual account number. Once they have the Ugift code, your friends and family can visit Ugift529.com to make their online gifts directly to your 529.

When friends and family ask for gift ideas, share that you are saving for your child’s future education with Ohio 529. Then invite them to join in with gift contributions to your Ohio 529 account with Ugift. After all, a gift for your child’s education will truly last a lifetime.

The quickest and easiest way to pass along your child’s Ugift code is with the ReadySave 529 app, which you can access as an Ohio 529 CollegeAdvantage account owner. At the bottom of every page is an Ugift icon. Click on the gift symbol to view your Ugift code which you can send immediately as an invitation via texts, emails, and Facebook/Instagram chats from your phone.

Or log into your account online to view your child’s Ugift code to send to family and friends who would like to give the gift of education.

The Ugift code doesn’t expire. Which means whenever there is an occasion to celebrate­ like baby showers, holidays, birthdays, graduations, and special achievements, your family and friends can give to your Ohio 529 account. And they can choose to contribute as much as they want whenever they want. It can be a one-time gift or recurring gift; all they need is that Ugift code. Your loved ones’ contributions - whether big or small – will add up over the years. Added to the power of compound interest, these gifts will power your 529 savings to cover even more college and career training costs.

An added bonus for gift givers who live in Ohio: They are also eligible to receive a state income tax deduction for their Ohio 529 gift contributions, up to $4,000 per year, per beneficiary.

To learn more about all of the gifting options with Ohio 529 and order cards for special occasions, visit  529 Gift Central.

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