Saving money for college can be hard for many parents who are living paycheck to paycheck. Even know it can be overwhelming at first, it is important to establish a goal and develop a customized plan. The Rhode Island 529 college savings plan helps parents come up with a program that can help them save for their children’s college tuition costs. The Rhode Island College Bound Fund is one of the best-known 529 college savings programs in America. There are many different benefits that can help parents accomplish their financial goals. Here’s an outline of some of the many advantages that exist when opening a 529 college savings program.
Rhode Island 529 College Savings Plans Tax Benefits
There are many different tax benefits that can save parents thousands of dollars over the years while they invest in the College Bound Fund. One of these tax benefits are tax-free earnings withdrawals. Assets that are deposited into the account grow tax-free. Withdrawals that are made for qualified higher education expenses are also federal income tax-free. This helps parents save more money faster while saving money on their taxes. Rhode Island taxpayers who make contributions to the College Bound Fund can receive a state income tax deduction of $500 per year. Married couples that file jointly can deduct up to $1000 per year. These tax breaks can be very helpful when trying to save for college tuition costs. Contributions that are made in excess of annual limit can be carried over to the next year in future years to come. Parents can also apply for the College Bound Fund grant program. This matching grant program provides eligible participants with matching funds when they make contributions into their Rhode Island 529 college savings plan.
Other benefits of the Rhode Island 529 college savings program
529 college savings accounts are very easy to open. Online applications exist for parents who want to start saving money now. It is very easy to start investing with monthly contribution amounts that meet your personal needs. Rhode Islanders can open a 529 account with as little as one dollar per month as long as they make a $250 initial investment. These low cost options make saving possible for all Americans. After the account has been open the account holder can choose from a wide variety of investment options.
Some of these options include age-based portfolios, fixed allocation portfolios, stable value options, and individual fund portfolios. These savings and investment options give parents full control of how they would like their money invested. Depending on how much risk an account holder is willing to take will drastically affect which investment portfolio is right for them. Investment strategies can be changed yearly giving account holders even more control. Assets can be used to pay for tuition costs of college or other qualified expenses. Some of these qualified expenses include books, room and board, equipment, and other related items associated with attending a university.
The Rhode Island College Bound Fund is a great way for parents to start saving money for their children’s future. The rising cost of college has outpaced inflation over the past decade. There is no better time than now to start saving with the Rhode Island 529 college savings plan.