This sponsored post was written by me on behalf of TIAA-CREF. All opinions are 100% my own.
Hubby paid his way through college by working full-time and still managed to graduate with a bachelor's degree in four years. As much as I hope Buddy will pay for some of his college education himself, I certainly hope Hubby and I are able to take most of the load off by helping him pay for school.
Although Buddy is just 5 years old, it's by no means too early to plan ahead for his future. There are many ways to be financially smart for the here and now. But sometimes we overlook the distant future, thinking it's just not important to focus on yet. However, beginning to invest in our childrens' future as early as possible is the best way to ensure a nice cushion for their college education and for the brightest future possible.
For one very special Elk Grove, California elementary school student, hoping to attend college will not just be a dream, but a reality. Last Friday, nine-year-old Duncan Nakamoto received the surprise of his life as he learned he won TIAA-CREF's Big Dreams Start Small $100,000 College Fund Contest.
Entrants in this nationwide contest submitted a photo and caption showing their child "dreaming big" for the future. Duncan's winning entry was revealed at a school assembly in front of 800 schoolmates, faculty and parents at Joseph Sims Elementary School. It was so exciting to be there and see Duncan's reaction to the news. To say this lucky kiddo was thrilled is a major understatement!
Duncan's father will receive $100,000 to be deposited in a new 529 college savings plan account until Duncan is ready for college. What a gift Duncan has received for his future!
What is a 529 college savings plan?
A 529 college savings plan, or simply called a 529 plan, is a tax-advantaged investment account for families to put aside money for their kids' college education.
TIAA-CREF is one of the leading 529 plan service providers around and currently manages the ScholarShare 529 college savings plan in California. Each state sponsors their own 529 plans, and you can open one in any state you choose depending on your needs. The beneficiary can attend any school in the country, no matter what state the 529 plan was opened.
The funds from a 529 plan can be used on tuition, books, housing and more at most accredited colleges, universities, and vocational and technical schools nationwide. Pretty much any college expense qualifies for use of 529 plan funds.
As the 529 plan account holder, you designate the beneficiary. Whether it's a child or grandchild, a niece or nephew, or even yourself, you have control of the 529 plan funds. The beneficiary can be changed, and you also determine distribution.
Once a 529 plan has been opened, family, friends or anyone can contribute. This is a fantastic way for anyone who wishes to pitch in, to do so. Also, initial contribution requirements to open a 529 plan can be as low as $25, and most 529 plans do not require regular contributions.
529 plans allow you to invest and grow college savings federal tax-free. As an added bonus, in California legislation was passed that provides a 20% state tax credit on for ScholarShare (California's 529 plan) contributions of up to $2,500 (for qualified individuals). Be sure to check with a representative of TIAA-CREF for more information on choosing the 529 plan that's right for you.
A 529 plan is definitely a smart way to help fund a college education little by little over many years, so there's no better time to start planning ahead for your child's future than right now. The gift of higher education is one of the best investments you can make to help him reach his potential in life!