In many cases the path to a child’s success is based on the education that they receive. As a parent you strive to provide them with all the resources that they need to be successful adults. Affording college tuition can be a daunting task to any parent who wants to see their child graduate college. The NextGen college investment plan was created by the state of Maine as their version of the 529 college savings plan. This program allows people to make outstanding contributions to their loved ones and help them obtain the money they need to pay for a higher education. There are many different benefits to the NextGen college program.
NEXTGEN 529 College Plan Tax Benefits
Any earnings that are incurred during the life of the NextGen account are exempt from federal income tax as well as state income tax. These exemptions can let you take the money that you save from paying tax and reinvested into your college education fund. There is no annual maintenance fees associated with your account as long as you are I resident of Maine. You may be eligible to receive a $200 dollar or $500 grant when you open up a NextGen account.
Flexibility and the 529 College Savings Plan
Most savings plans do not offer the benefits that the 529 college savings program does. You retain control of the account and over the funds in the account. The beneficiary has no access to the assets in the account until you say so. If the beneficiary does not use the money in the account you have the option of changing the beneficiary or withdrawing the funds from the account. If you make withdrawals from the account that is not for schooling you will have to pay tax on the amount taken out. This control gives you the flexibility that you need to obtain the financial goals that you are looking to achieve.
How Much to Contribute to Your Maine 529 College Saving Plans?
The amount of contributions that you make towards your college savings plan is completely up to you. There are no limitations on who can make contributions to your NextGen account. You can make contributions as well as $25 and as high as $340,000 per beneficiary. These options give you more opportunities to help make your children’s dreams come true.
Relatives and friends can also participate in investing in your child’s future education. They can also receive tax benefits from their contributions. Once you have opened your account you can make monthly contributions automatically. The account can be set up to take money directly from your checking or savings account to keep you on pace for your savings goals. Automatic payments can be a great way to stay disciplined and on the right track.
Tax-deferred compounding accounts can be a great way to save small amounts of money and see substantial gains. These are some of the many reasons why you should consider the Maine, NextGen 529 college savings program. By investing money for college on a regular basis, you can make sure your child has the money they need to attend a university.