Investing in their child's future college education tops some parents' holiday gift list

Asia's Tech News Daily

SolStock | E+ | Getty Images

Looking for a meaningful holiday gift? Consider putting money toward a child's future education costs.

Nearly half of parents (45%) may ask family and friends this year to contribute to a 529 college savings plan for their kids, according to a survey from the College Savings Foundation. That compares with 84% of parents who would welcome such contributions in lieu of traditional presents, research from Fidelity Investments shows.

“It's a smart gift,” said Mary Morris, CEO of Virginia529, a state agency. “And 529 programs have made it easier to do.”

More from Personal Finance:
Here are must-know changes for the 2021 tax season
9 money moves to make before becoming your own boss
The 12 days of Christmas are more expensive this year

There are roughly 15.3 million 529 accounts held across the country, with $464 billion in assets, according to the College Savings Plans Network. They can be used to cover higher education costs, as well as private or religious school tuition through grade 12 (up to $10,000 per year), student loan repayment ($10,000 lifetime maximum) and expenses related to a certified apprenticeship.

Assets in these state-sponsored accounts are invested and grow tax-deferred, and as long as the money is used for qualified education expenses, distributions come with no federal tax (and, in many cases, no state tax). Generally speaking, assets are invested in age-based portfolios, which start off with higher stock exposure early in a child's life and then become more conservative as the college start date approaches.

College isn't getting any cheaper. For the 2021-22 school year, students enrolled at a public four-year school can expect to pay an average of $22,690 for tuition, fees, and room and board, according to the College Board. The average at a private college is $51,690.

While financial aid (e.g., grants, scholarships and loans) is available to students who qualify, setting aside money for future expenses can lessen the sting of the eventual price tag. And, Morris said, even small contributions help.

Most 529 plans offer a way for friends or family to gift money to an account, Morris said. For example, Virginia529 allows you to make a direct contribution through its online portal and also has gift cards that can be digitally delivered or purchased at some retailers.

Many other states participate in a service called Ugift: Parents get a unique code that can be provided to family or friends, who use it to contribute to the 529 account online. It's also worth checking a plan's website to see how gifts can be made.

While there is no federal tax deduction that comes with 529 contributions, there may be a state tax break, depending where you live and what plan you're investing in. Some states only allow the account owner to take a deduction for contributions, while others let non-account owners get a tax break for their gifts.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Energi Norge warns against setting a maximum price for electricity

According to Energi Norge, setting a maximum price for electricity could lead to critical energy shortages in Norway and stop the green shift. Several political parties have advocated a maximum ... Read more »

UK tourism industry in peril as overseas visitors stay away

Photograph: Ben Stansall/AFP/Getty Images More than 40% of firms say they are likely to go under despite staycation boom Last year’s boom in British summer holidays was not enough to ... Read more »

Meme Stocks, De-SPACS and Biotech Slump in Rough Start to 2022

1 / 6Meme Stocks, De-SPACS and Biotech Slump in Rough Start to 2022 (Bloomberg) — Meme stocks, blank-check companies and high-flying biotech names that were all the rage at the ... Read more »

Bitcoin Options Shift Has Some Bulls Calling $40,000 the Bottom

1 / 3Bitcoin Options Shift Has Some Bulls Calling $40,000 the Bottom (Bloomberg) — Investors searching for clues as to where Bitcoin is headed next may want to take a ... Read more »

Anyone at age 65 should evaluate how — or if — Medicare will fit into their health-care coverage. Here's why

miodrag ignjatovic | E+ | Getty Images It's not just retirees who need to think about Medicare. Anyone who plans to keep working when they reach the eligibility age of ... Read more »

The Tax Administration believes that Norwegians are sitting on billions in unreported cryptocurrencies

The Tax Administration is now stepping up its efforts against unreported cryptocurrencies. It believes that several hundred thousand Norwegians have not reported cryptocurrency to the authorities. “New figures show that ... Read more »

The Fed is about to see a lot of new faces. What it means for banks, the economy and markets

Sarah Bloom RaskinAndrew Harrer | Bloomberg | Getty Images In what likely will be just a few months' time, the Federal Reserve will look a lot different: Three new governors, ... Read more »

Wage inflation has arrived in a big way and Jamie Dimon says CEOs 'shouldn't be crybabies about it'

Jamie Dimon, chief executive officer of JPMorgan Chase & Co.Giulia Marchi | Bloomberg | Getty Images Banks have been one of the main beneficiaries of high inflation recently because their ... Read more »

Amy Schneider's more than $1.1 million in 'Jeopardy!' winnings will come with a hefty tax bill

This image provided by Jeopardy Productions, Inc. shows game show champion Amy Schneider on the set of “Jeopardy!” Schneider is the first trans person to qualify for the show's Tournament ... Read more »

Glaxo Rejects $68 Billion Unilever Bid for Consumer Business

1 / 2Glaxo Rejects $68 Billion Unilever Bid for Consumer Business (Bloomberg) — GlaxoSmithKline Plc rejected an offer from Unilever Plc for the drugmaker’s consumer healthcare unit last year that ... Read more »

Even After Big Price Cuts, These Tech Stocks Are No Bargains

1 / 3Even After Big Price Cuts, These Tech Stocks Are No Bargains (Bloomberg) — To see why a leveling of tech valuations has the capacity to terrify even staunch ... Read more »

Fed Will Find It Hard to Talk About Path Ahead After March Hike

1 / 2Fed Will Find It Hard to Talk About Path Ahead After March Hike (Bloomberg) — Federal Reserve officials head toward their January meeting with only tentative conviction that ... Read more »

4 dirt-cheap FTSE 100 shares I'd buy in 2022

Screen of price moves in the FTSE 100 I’m thinking about buying these ultra-cheap FTSE 100 shares. Allow me a few minutes to explain why I believe they could help ... Read more »

Charting the Global Economy: Inflation's Grip Tightens Further

Charting the Global Economy: Inflation’s Grip Tightens Further (Bloomberg) — Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast. Most Read from Bloomberg ... Read more »

Yamal gas pipeline continues flowing eastwards from Germany to Poland

A view shows pipelines near Gazprom’s gas processing facility at Bovanenkovo gas field MOSCOW (Reuters) – The Yamal-Europe pipeline, which usually sends Russian gas west into Europe, flowed east from ... Read more »

Russia Rejects IEA Charge It's to Blame for Europe Gas Crunch

Russia Rejects IEA Charge It’s to Blame for Europe Gas Crunch (Bloomberg) — Most Read from Bloomberg Russia has nothing to do with the energy crisis in Europe, Deputy Prime ... Read more »

What's next for the Lloyds Bank share price?

A brochure showing some of Lloyds Banking Group’s major brands If there is one stock that has started 2022 on a good note, it has to be the FTSE 100 ... Read more »

Apple complies with Dutch watchdog ruling on payment options in Netherlands

FILE PHOTO: The Apple Inc. logo is seen in the lobby of New York City’s flagship Apple store AMSTERDAM (Reuters) – Apple said on Saturday it would allow developers of ... Read more »

Betting Against the U.K. Is a Favorite Trade in Currency Markets

1 / 3Betting Against the U.K. Is a Favorite Trade in Currency Markets (Bloomberg) — Most Read from Bloomberg The pound’s best start to a year since 2018 is enticing ... Read more »

France's Nuclear Champion Sacrificed to Stave Off Energy Crisis

(Bloomberg) — Most Read from Bloomberg High energy prices are bearing down on Europe’s economy like a freight train, and France just pushed its largest electricity producer into the path ... Read more »

UK considering bank loan plan to smooth energy cost hit - BBC

Flames come out of a domestic gas ring of an oven in Durham, Britain, September 23, 2021. LONDON (Reuters) – Britain's government is considering plans to smooth a sharp rise ... Read more »

Will high inflation lead to a stock market crash?

Dictionary definition of inflation We are only two weeks into 2022 so far. And it is already becoming clear that inflation could be the one big risk to my investments ... Read more »

‘Nearly' penny stocks! 2 dividend-paying shares I'd buy

A person holding onto a fan of twenty pound notes I think these low-cost UK shares could help me make a heap of cash. Here’s why I believe these dividend-paying ... Read more »

Should You Buy Webster Financial (WBS) Ahead of Earnings?

Investors are always looking for stocks that are poised to beat at earnings season and Webster Financial Corporation WBS may be one such company. The firm has earnings coming up ... Read more »

General Electric (GE) Arm Wins Wind Turbine Deal From Continuum

General Electric Company’s GE business unit, GE Renewable Energy, recently secured a contract from Continuum Trinethra Renewables Pvt Ltd for delivery, installation and commissioning of onshore wind turbines. Continuum Trinethra ... Read more »

Is D.R. Horton (DHI) Stock Undervalued Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. ... Read more »

Should You Buy Triumph Bancorp (TBK) Ahead of Earnings?

Investors are always looking for stocks that are poised to beat at earnings season and Triumph Bancorp TBK may be one such company. The firm has earnings coming up pretty ... Read more »

Are These Utilities Stocks Undervalued Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. ... Read more »

How to Get Money Off Cash App Without a Bank Account

Businesses adapt to the fast-paced environment as technology continues to evolve. Keeping an eye on transactions remains an integral aspect of growth and capacity. Today, cashless payments provide more convenience, ... Read more »

Recent Price Trend in SmarFinancial (SMBK) is Your Friend, Here's Why

Most of us have heard the dictum “the trend is your friend.” And this is undeniably the key to success when it comes to short-term investing or trading. But it ... Read more »

Meta Sued For $3.2 Billion In The U.K. Over Personal Data Exploitation

Meta Platforms Inc (NASDAQ:FB) could end up paying a whopping $3.1 billion, following a class action in the U.K. over allegations of the internet giant exploiting the personal data of ... Read more »

Should Value Investors Buy Beacon Roofing Supply (BECN) Stock?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are ... Read more »

Is Standard Motor Products (SMP) Stock Undervalued Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. ... Read more »

Applied Industrial (AIT) Exhibits Bright Prospects, Risks Persist

Applied Industrial Technologies, Inc. AIT has been benefiting from the healthy demand for products and solutions in industrial end markets, along with its pricing actions and growth initiatives. The company’s ... Read more »

4 Stocks to Watch From the Prospering Business-Software Services Industry

The Zacks Business-Software Services industry is benefiting from heightened demand for digital transformation and the ongoing shift to the cloud. Growing automation business processes across multiple industries and rapidly increasing ... Read more »

Despite Fast-paced Momentum, Build-A-Bear (BBW) Is Still a Bargain Stock

Momentum investing is essentially an exception to the idea of “buying low and selling high.” Investors following this style of investing are usually not interested in betting on cheap stocks ... Read more »

Many sports teams in Norway are shocked by the high electricity prices: “Very worrying”

The electricity costs of sports teams in Norway were on average two and a half times as large in November and December of 2021 than the year before, according to ... Read more »

Here are 4 ways to get your retirement savings plan back on track

Geber86 | E+ | Getty Images Saving for retirement can seem like a far-off goal when other priorities — from day-to-day expenses to managing debts — feel more urgent. But ... Read more »

Here's Why Buying Brown and Brown (BRO) Stock Seems Prudent

Brown and Brown’s BRO solid segmental performance, sturdy financial position and effective capital deployment along with favorable growth estimates make it a good investment choice.This insurance broker has a solid ... Read more »

4 High-Flying Food Products Stocks with More Upside

Shifting consumer preferences toward easy-to-eat and ready-to-make nutritious food items is driving the food products industry’s growth. Advances in packaging and food preservation processes should also drive revenue growth for ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic