For most people, lifetime earnings will double with the benefit of a college degree. Being able to afford to pay for college is another thing. College tuition costs have more than doubled in the last five years. They are expected to increase rapidly in the future years to come. The Nebraska 529 college savings plan is a great way to start saving for your child’s future education. The college savings plan of Nebraska got rated as one of the top three 529 plans in the United States.
Kiplinger’s personal finance rated the college savings plan of Nebraska as one of the elite programs in the nation. There are many different benefits to this outstanding program. Parents can take advantage of the many different benefits that are included with the 529 savings plan. Here are some of the many benefits that you will want to consider when making your decision on enrolling in the 529 savings plan.
Nebraska 529 College Savings Plan Tax Advantages
There are numerous tax benefits that exist with the 529 college savings plan. This is one of the many reasons why saving for college with the Nebraska college savings plan is so important. Contributions that are made to the plan grow tax-free from Nebraska state income tax as well as federal tax. Nebraska taxpayers can qualify for a $5000 income tax deduction. These tax benefits help your investments grow faster. There are also estate tax benefits that can be very beneficial for people who want to find a way to remove money from their estates while helping a loved one afford a higher education. Gift tax exemptions can be made up to $65,000 over a five-year period of time.
Affordability and Flexibility with the College Savings Plan of Nebraska
Account flexibility is one of the many benefits that come with the college savings plan of Nebraska. Withdrawals from accounts can be used at eligible schools nationwide and some foreign schools. The Nebraska college plan covers almost all expenses that are associated with college. These expenses include the cost of books, fees, tuition, room and board, and equipment and supplies. The plan was also designed to meet the needs of every family and every budget. There are no annual contribution requirements. You can contribute a maximum of $13,000 per year per beneficiary. Contributing to the Nebraska plant is very simple and easy. You can make contributions by check, automatic investment plans, or automatic payroll deductions. You can also take advantage of the many different investment options that exist.
Portfolio Planning with the 529 College Savings Plan
When you open a college savings plan of Nebraska account you have a wide variety of investment choices at your disposal. These portfolios include age-based portfolios, target portfolios, individual fund portfolios. The most popular portfolios that have shown great promise with investors are the age-based portfolios. These programs set up a customized plan based on your child’s current age. This customized plan normally starts off with purchasing moderate to aggressive stocks. As your child gets closer to attending college the stocks are sold off in exchange for more conservative options like money market funds. You have full control of how your money is invested and which portfolio is right for you.
One of the best ways to pay for college is to have a detailed plan in place. The college savings plan of Nebraska offers you a great way to make saving easy and affordable. This is why the Nebraska 529 college savings plans are rated one of the top plans in the country.
NEST (Nebraska Educational Savings Trust) is launching a new product – the Bank Savings Individual Investment Option – that is FDIC Insured. Information on NEST in general is in the “NEST Background” section, information on the new product is in the “About the Bank Savings Individual Investment Option” below.
• Reduced portfolio expenses (net of asset-based fees) by up to 52 percent, resulting in total estimated annual asset-based fees being reduced by an average of 0.03 percent each for NEST Direct and NEST Advisor Plans. The TD Ameritrade 529 Plan has also been reduced.
• Modestly expanded the underlying fund asset classes in response to current and projected market conditions, resulting in more diversified investments well suited to respond to market variability. Fixed Income diversification was achieved by adding a Global Bond fund and Short-Term Bond fund into both the allocations and individual options. Individual Option diversification was achieved by adding Equity Income and Emerging Markets funds.
• Fine-tuned allocations to existing underlying funds to reduce cost and expand diversification. Recognizing the current state of money market investments, administrators reduced allocations to the money market fund in Age-Based and Static options and added other low risk investments, including the plan’s FDIC-insured option, into the NEST Direct and NEST Advisor Plans.
• Maintained open architecture plans at reasonable costs by selecting new or replacement funds with an eye towards providing solid and affordable investments, including adding iShares, SPDR and Vanguard exchange traded funds (ETFs).
• Enhanced the customer experience by adding innovative, useful and cost-effective features including dollar cost averaging through systematic exchanges and the ability to waive the Class A load for assets rolling in from other 529 plans, if permitted by the broker dealer firm.
Kiplinger’s Personal Finance magazine named NEST the “Best College Savings Plan” for Fund Selection in 2011 and these investment changes are intended to build upon the strong line-up of investment options that already exists within the plan. If you have any questions, or would like a copy of the press release, feel free to let me know!
About the Bank Savings Individual Investment Option
Effective October 17, 2011 families will have a low-cost investment option that is not tied to stock market fluctuation but has all of the benefits the other NEST plans have to offer – the Bank Savings Individual Investment Option. This new option will be available for both the NEST Direct and NEST Advisor College Savings Plans. The Bank Savings Individual Investment Option can be one part of a customized savings portfolio or it can be the only investment option. Key benefits of the new investment option are:
o No minimum contribution, balance, or holding period
o No withdrawal fees
o A low 0.20% total annual asset based fee
o No advisor fees in the NEST Advisor Plan
Competitive Interest Rates
o At launch, the interest rate will be .80%
o The annual percentage yield (APY) will change over time
o The APY will be posted online in the Prices & Performance tab in Investments & Performance on www.NEST529Direct.com & www.NEST529Advisor.com.
FDIC insurance up to $250,000 when combined with any other account owner holdings at FNBO).
Convenient – Just like any other NEST investment investors can
o Receive all the same federal and state tax advantages
o Transact and maintain their investment online, over the phone or by mail using the same procedures
o View the investment’s progress online through secure account access and on confirmations and quarterly statements