This morning I got a call from the small one, not terribly unusual, she texts or calls quite often. Today she was in a panic that she had fried her Mac desktop. I’m no good at tech support and I’m really no good at Mac tech support. The incident led to a discussion about the very good, very fast, very reliable and very heavy laptop her grandparents gave her for Christmas last year. It’s so heavy that she’s having difficulty lugging it around campus and she’d like to have a smaller notebook. We aren’t even to her first winter break yet and I can tell we are headed into four years of issues that will require the shuffling of money and reorganization of our payment plan for college. Fortunately I recently attended a day long session about the Arkansas 529 college savings plan also known as The GIFT Plan. Less fortunate is the fact that I have not made the most of that savings option over the years I’ve had the account. I’ve heard stories of parents completely funding their children’s higher education and even having funds left over while taking advantage of being able to deduct their principal deposits to the account off their Arkansas state tax returns. I have not come close to saving that much, but this weekend I learned that I can still take advantage of many of the benefits while saving as she’s still in school.
Four year university study has been the choice of all our kids, the youngest is just beginning her journey. Adults with a bachelor’s degree earn 62% more than peers with a high school diploma. But, if any of them had shown interest in a trade or apprenticeship program, we would have encouraged that too. The beauty of the GIFT Plan is that it will help save for many education options including trade school, community college and traditional university study. There is easy online enrollment.
I’ve done some things right, I’ve used the option of saving through Upromise and shopping through the website when I make purchases online. I wish I would have set up more regular deposits into the account to build principal faster. I also wish I had asked friends and family to make contributions to their future with UGift on birthdays, holidays and special occasions.
For many of them it would have helped with their tax savings while doing something good for us. One of the many benefits of the GIFT Plan is the Arkansas state tax deduction and estate tax advantages.
“If you’re an Arkansas taxpayer, you can deduct up to $5,000 (up to $10,000 for married couples) of your GIFT Plan contributions from your Arkansas adjusted gross income.
You can contribute up to $14,000 (up to $28,000 for married couples) per designated beneficiary each year to your GIFT Plan account without incurring federal gift tax consequences. And you can contribute up to $70,000 per designated beneficiary in a single year (up to $140,000 for married couples) to take advantage of five years’ worth of federal tax-free gifts at one time. Withdrawals used to pay for qualified higher education expenses are free from federal income tax, so more of your savings can go toward paying for college instead of toward taxes.” from the GIFT Plan
My plan for the next few years is to save as much as I can in my 529 account. I also plan to give every new mom I know an information packet and a check to start an account for their new little bundle of joy. I’m going to shop through Upromise to get cash back on the purchase of the long-johns the kid needs because it’s colder where she is than it is here at home and then I’ll research laptops through the cash back options on RewardU through Upromise that includes vendors like the Apple Store, HP, and Best Buy.
I participated in a free educational financial planning workshop sponsored by the Arkansas State Treasury and Arkansas529, but all opinions and recommendations in this post are my own.