Trussville, Ala. (March 25, 2015) – When Mitch Amick of Trussville opened a CollegeCounts Alabama’s 529 account, he did so in honor of his two young grandchildren, both of whom won’t know for some time the impact of their grandfather’s ongoing investment.
“The grandkids are 18 months and 4 years old, so they won’t appreciate what this is for many years,” Amick said. “I wanted to give them the chance to have their college paid for and not have to start out adult life in debt.”
According to The College Board – Trends in College Pricing report, annual tuition, fees, and room and board at a public two-year, in-state institution has 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 costs involved with a two- or four-year degree – and the importance of starting to save early.
Across Alabama, parents, grandparents and other guardians are taking notice of the rising costs of college and are working to ensure their young family members do not have to bear the burden of debt alone – no matter how far into the future that debt may be.
“This program makes the investment and savings process very easy,” Amick said.
CollegeCounts has no minimum contribution requirements, allowing families to open accounts and save a little each month through quality investment funds, including Vanguard, T. Rowe Price, Fidelity, PIMCO, Dodge and Cox, MainStay and DFA.
“When I began researching about savings programs online, I came across Alabama’s CollegeCounts 529 and its many benefits,” Amick said. “As I kept reading and learned more about tax implications for account holders, I became more and more interested.”
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 state income tax deduction of up to $5,000 ($10,000 for married couples filing jointly) on contributions to CollegeCounts each year.
“The CollegeCounts, Alabama’s 529 plan, was designed to help families save for college while at the same time benefit from the program’s various tax advantages and benefits,” said Alabama State Treasurer Young Boozer. “The first step for any family is to determine how much – no matter how small or large – the initial investment will be. From that point forward, we encourage contributing frequently to reap the best return.”
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 such as tuition, fees, room and board, books, and supplies required for enrollment.
To learn more about the 529 program and how to open an account, please visit CollegeCounts529.com.