Once you open a Vanguard 529 Plan account, it’s time to celebrate because you’ll be one step closer to a secure future. Then check out these 4 tips on how to stick with it and make the most of your education savings.
1. Contribute consistently
Choose a schedule option to set up automatic recurring contributions that transfer directly from your bank account to your 529 account. It can make saving easier and can help give you peace of mind that you’re progressing toward your goal.
2. Share the news with family and friends
Almost anyone can contribute to a 529, and there are many ways to do so. Use a personalized Ugift® code online or via text, enclose a personal check in a birthday card, or allocate part of an estate. Remind loved ones that 529 contributions are a great way to celebrate any occasion.
3. Take advantage of each tax year
Depending on the state you live in, you may be able to deduct 529 contributions from your state income tax. Our calculator can help estimate the state tax deduction you could receive.
While there are no limits on annual contributions, there is a maximum account balance of $500,000 per beneficiary. For larger contributions, look into what amount qualifies for the annual gift tax exclusion for the current year.
4. Know your flexible spending options
529 plan assets can pay for more than just 4-year college tuition, so consider your spending options to get the most out of your investment. For example, your 529 can help fund tuition and fees for accredited vocational or trade schools. You can even use up to $10,000 toward qualifying student loan repayments.*
Are you getting started as a brand-new account owner?
The future is in your hands
As the account owner, you have control over your Vanguard 529 account. When you log in, you can make a onetime contribution, set up recurring contributions, or copy your plan’s Ugift code to share with family and friends. There’s no required frequency of contributions, and each contribution is just a $50 minimum.
The sooner you start, the more time you’ll have to save.
*Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. State tax treatment of withdrawals used for i) expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school, ii) expenses related to apprenticeship programs, or iii) student loan repayments is determined by the state(s) where the taxpayer files state income tax. If you are not a Nevada taxpayer, please consult with a tax advisor.
All investing is subject to risk, including the possible loss of the money you invest.
For more information about The Vanguard 529 College Savings Plan, obtain a Program Description (PDF), which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor.
The Vanguard 529 College Savings Plan is a Nevada Trust administered by the office of the Nevada State Treasurer.
The Vanguard Group, Inc., serves as the Investment Manager for The Vanguard 529 College Savings Plan and through its affiliate, Vanguard Marketing Corporation, markets and distributes the Plan. Ascensus Broker Dealer Services, LLC, serves as Program Manager and has overall responsibility for the day-to-day operations. The Plan’s portfolios, although they invest in Vanguard mutual funds, are not mutual funds. Investment returns are not guaranteed and you could lose money by investing in the Plan.
If you are not a Nevada taxpayer, consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Other state benefits may include financial aid, scholarship funds, and protection from creditors.
Ugift is a registered service mark of Ascensus Broker Dealer Services, LLC.