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7 things every 529 investor should do this year
4. Adjust your automatic contributions
If you previously set up automatic monthly contributions with your 529 plan, or a payroll deduction plan through your employer, determine if your current budget allows you to increase the amount of your periodic contributions. Even a small increase can make a major difference in the amount available to pay for college down the road.
If you are not currently making automatic contributions to your 529 plan, consider doing so now.
5. Let interested relatives know you have a 529
You don't want to be obnoxious in promoting your child's college-savings account to all your friends and relatives, but some of them will be receptive to a suggestion that contributions to a 529 plan be made in lieu of gifts of electronic games on birthdays and holidays. Of course, the best way for this to happen is for the money to go into the 529 plan you have already established, rather than having others set up their own accounts for your child.
To do this, you must let your most-likely contributors know about your 529 plan. With most plans, a check made out to the name of the 529 plan is sufficient and would not require that you communicate your account number or child's social security number. Simply receive the check and mail it to your 529 plan along with your filled-out contribution form.
If you want to be more formal and systematic about the whole process, with pre-written instructions and the ability of your relatives to make direct contributions to your account, check with your plan to see if it offers a "friends and family" service. You can also investigate the commercial gifting services like:
6. Open a 529 rewards account
Rewards programs can be great as long as they are free to join and do not steer you to purchases that you can buy at lower cost somewhere else. The biggest rewards program geared to college savings and 529 plans is Upromise Rewards. Also consider credit card programs that rebate a percentage of your purchases directly to a 529 plan, like the ones offered through Fidelity, Upromise, and 529 plans in Alabama and Illinois. Sage Scholars is also a popular rewards programs where certain investments you make turn into guaranteed scholarship dollars at participating private colleges located throughout the country.
7. Download Savingforcollege.com's Family Guide to College Savings
It's free, so why not? This handy guide from Savingforcollege.com takes you through the various higher-education tax incentives including 529 plans, Coverdell education savings accounts, education savings bonds, the American Opportunity Tax Credit, and the Lifetime Learning credit. The booklet also discusses budgeting for college expenses and other issues including legal considerations. Free downloads are available for a limited time only, so download your copy today.
Posted 2012-06-29
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