If you live in Arkansas and have children you want to consider the new Arkansas 529 college savings plan. This plan was created by the state to help families lock in the cost of expensive college tuition at today’s rates. Studies have shown that the costs of tuition will more than double in the next five years.
Additional items can be added to the savings plan to cover fees that include room and board or other qualified college expenses. This takes the financial burden off the student which gives them the best chance to excel while attending a university. Investing in your child’s education can be one of the best investments that a parent makes in their lifetime.
Arkansas State Tax Deduction
Arkansas offers state tax benefits that can help your dollars work harder for you. The 529 college savings plan is a tax deferred account. This means the money that is put into the savings plan is not taxable by the state or federal government. There are also tax benefits for gifts and estate contributions. This means that grandparents or other family members can make tax-free contributions to the beneficiary of the 529 college savings plan tax-free. The limit on an estate tax contribution is $65,000 per beneficiary.
How much does the Arkansas 529 College Savings Plan Cost?
You can open up a 529 college savings plan for as little as $10 per month. There is a one-time contribution of $25 that must be made to open the account. Contributions can be made monthly through payroll direct deposits with only a five dollar minimum payment. There are small processing charges that exist which can normally cost .5% of the total amount of money deposited over the timeframe of the plan. This makes college saving very affordable and convenient.
Professional Investment Management
When investing money in Arkansas 529 college savings plan you will have to make decisions on how you would like your money invested. There are many different plans that are available to each account holder. These options include direct hands on approach to investing or less involved plans that invest in several different funds. The Vanguard group is one of the chosen investment brokers that are used by the Arkansas state plan. This means that account holders can speak to Vanguard representatives and get information on strategies and investment ideas.
Ugift Program to Fund 529 Plan
Arkansas has developed a program called Ugift. This program works with contributions that are made toward the 529 college savings plan. These gifts are offered to family members that are looking for a way to give a gift to help someone pay for their college tuition. Ugifts can be used for all types of occasions. These occasions include birthdays, religious celebrations, school milestones, and holidays. This can be a great way for family members as well as friends to get involved in a new kind of gift giving. These gifts will last a lifetime.
The Arkansas 529 college savings plan is a great way to help parents save money for their children’s future education. It is one of the best programs that the state of Arkansas has developed to take care of their citizens. This program is very affordable and should be used by all families who believe in higher education.