Author: Deborah Goodkin, Managing Director, Savings Plans, First National Bank of Omaha
Each September, as a new school year begins, our young children, grandchildren, nieces, nephews and family friends draw a year closer to higher education. Maybe they’re learning to read, and building the skills that will serve them in college and beyond. Or maybe they’re writing their first essays, exploring after-school activities or beginning their school search. Whether age 8 or 18, each of these young learners has come back to school ready to develop and pursue their dreams for the future.
That’s why each September we also celebrate College Savings Month – an opportunity to highlight the financial tools that help families make these big dreams a reality. With the NEST 529 College Savings Plan there’s a lot to celebrate, from tax savings to intelligent investing and unique opportunities for growth. Read on for a breakdown of the major benefits to saving with NEST 529.
One of the greatest advantages to investing in a NEST 529 account is that contributions grow federally and state tax-deferred, helping Account Owners get the most out of every dollar they save. Even better, when the time comes to use the funds in a NEST 529 account, withdrawals used for qualified educational expenses such as tuition, room, board and more are tax-free.
In addition to tax-deferred growth and tax-free withdrawals, investing in a NEST 529 account can also have significant state income tax benefits. Account Owners in Nebraska are eligible for an annual state income tax deduction of up to $10,000 for NEST 529 contributions, or $5,000 per spouse if filing separately.
Account Owners living outside of Nebraska have options as well—some states offer a tax benefit even if Account Owners are investing in another state’s plan. Consult with a financial advisor or tax professional to determine your eligibility for state tax benefits.
Personalized Investment Options
NEST 529 offers a diverse and personalized range of investment options to help Account Owners fit their unique preferences and circumstances. If you prefer a hands-on investment approach, you can make these moves yourself through your choice of Static or Individual Investment Options – you have the power to switch investment options twice per year per beneficiary.
Or, if you’d rather leave your portfolio to the investment experts, you can take advantage of the NEST 529 Age-Based Investment Options, where your investment risk is automatically adjusted and reduced over time as your child becomes closer to enrollment age. With this method, your account will be placed in a portfolio based on your child’s age and will automatically move from more aggressive to more conservative over time.
In the end, no matter which Investment Option or method you choose, the sooner you begin contributions the more time you’ll have to reap possible market rewards. And while college may seem far off, don’t forget: the earlier you start saving, the more opportunity you’ll have to reach your goal.
College Savings Community
At NEST 529 we work to create an open, accessible and beneficial savings community. Through blog posts like this one, as well as the NEST 529 Facebook page, we keep Account Owners up to date on any relevant Plan updates, offer tips to help you get the most out of your account, and share information – financial, educational and more – that we know our community can use.
We also offer frequent scholarship opportunities to our growing community, as a chance to engage as a family with the topic of college savings and work together to win a savings boost. In 2018 alone we awarded more than $120,000 in scholarships and account bonuses, and we’re not slowing down.
This College Savings Month, we can all take the opportunity to celebrate the good things in life: awesome kids, bright futures and a robust college savings plan.
For any additional questions regarding contributions or NEST 529, reach out to us at firstname.lastname@example.org, or by calling 1-888-993-3746.