Renee chats with Tony Durkan, Vice President, Head of 529 & CHET Relationship Management at Fidelity!
A major goal of the office is to ensure the accessibility of these programs to youth, adults across the generations, and underserved populations in the state.
While saving for college can be daunting for parents, CHET 529 offers five tips to make the process more accessible:
1. Just start. The key to saving is beginning. CHET’s 529 plan has no minimum to open and no annual fee.
2. Leverage tax advantages. CHET is the only 529 plan with a CT income tax deduction. You can take a state income tax deduction on your contributions up to $5,000 for single filers and 10,000 for married couples filing jointly. Additionally, with CHET, any earnings grow federal and state income tax deferred which means you can save more over time. When you withdraw the money to pay for qualified education expenses, it’s tax-free.
3. Save regularly. Consistency is king. Saving $49 a week can translate into potential savings of more than $100,000 when invested over 18 years.
Estimated numbers have been rounded to the nearest dollar. This hypothetical example assumes the following: (1) monthly contributions of $208.32 made to a 529 account made on the first of each month beginning when the child is born and continuing through age 18, (2) annual rate of return of 7.5%, compounded monthly, and (3) no taxes on any potential earnings within the 529 College Savings Plan account.
4. Make saving social. Invite family and friends to contribute so your savings have the potential to grow faster. Post a link to your child's gifting homepage on social media. You may be surprised by the friends and family who would like the opportunity to help.
5. Focus on your goal. Remember, saving for education is a long-term plan. You can revisit your existing investment strategy twice a year to make sure you’re properly allocated to meet your goals.
For more information about CHET and its 529 College Saving program, click here!
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