In honor of observance, Alabama State Treasurer urges families to plan for the future
Today marks the start of College Savings Plans Network’s third annual “College Savings Month,” an observance in which 529 programs across the nation, including Alabama’s CollegeCounts 529 Fund, educate families on 529 savings plans and the importance of opening and contributing to accounts early and often.
In Alabama, the CollegeCounts 529 offers parents, grandparents and other family members a number of quality investment options – including Vanguard, T. Rowe Price, Fidelity, PIMCO, Dodge and Cox, MainStay, and DFA – to help save for potentially costly college tuition and fees in the future.
“With K-12 students now back in the classroom, September is the perfect time to stress the importance of thinking about the next step for these children and how families can save now to relieve the stress of college costs later, ” says Young Boozer, Treasurer for the State of Alabama and board chair for CollegeCounts.
CollegeCounts has no minimum contribution requirements, allowing families to open accounts and invest small amounts each month.
“Everything families can do financially now will, over the course of time, help to decrease college costs down the road – all while providing tax advantages along the way,” Boozer said.
Under the 529 Section of the tax code, special tax benefits are provided to families saving for future college expenses. Alabama taxpayers may receive a generous state income tax deduction of up to $5,000 ($10,000 for married couples filing jointly) on contributions to CollegeCounts each year.
Funds may be withdrawn and used at colleges, universities, trade schools and graduate schools at one-, two- and four-year schools in Alabama and across the U.S. – including vocational, technical, community, public and private colleges and universities – for qualified expenses like tuition, fees, room and board, books, and supplies required for enrollment.
According to The College Board – Trends in College Pricing report, annual tuition, fees and room & board at a public two-year, in-state institution have increased to an average of $11,050. For those same expenses at a public four-year, in-state institution, that increase was to an average of $18,940 for a year. These are averages from across the country and illustrate the significant costs involved with a two- or four-year degree – and the importance of starting to save early.