written by Chelsey Dollarhide
This is the fourth article in our Retirement Series. Click here to read our introduction.
In this current economy, a college education is more important than ever to help in securing a career. And, with tuition costs on the rise, saving for your children’s college is more vital than ever. By saving for college now, you are making an investment in your child’s future. But where do you start?
One such option is with a MOST Plan – Missouri’s 529 College Savings Plan. With MOST 529 Plans, you can start saving for children, grandchildren, friends, or even yourself. You can enroll for free and invest as little as $15 per contribution. Contributing is convenient: you can contribute to your MOST 529 account by check, automatic investment, electronic bank transfer, payroll direct deposit, or by moving assets from other college savings accounts. While there are student loans that offer low interest rates, by contributing even as little as $15 a month, you can reduce reliance on student loan debt to cover college expenses. Without student loans, you can earn interest in the present instead of paying interest in the future.
A major benefit to a MOST 529 Plan is that up to $8,000 per year ($16,000 for married couples) in contributions are deductible on your Missouri income tax return, decreasing your total Missouri income tax liability. Another major benefit to a MOST Plan versus a traditional savings plan is the tax-free growth of your 529 Plan Assets. As long as withdrawals from your savings are used for qualified education expenses, income earned on your contributions is not taxable on your federal or Missouri income tax return. Qualified expenses include tuition, fees, books, certain room and board expenses, and supplies at any eligible college, trade, or technical school in the United States or abroad.
If you would like to discuss whether this is the right college savings plan for you, give us a call at (417) 881-0145.