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#529Day Is Important Every Day

Wednesday, 29 May 2019 12:00

A 529 Plan is a common way to save for college.

“There’s a good tax benefit in New York state. It’s 100% tax free if you use it for qualified educational expenses, and it grows tax deferred,” said CAP COM’s Ryan Chenot “Plus, a 529 Plan gives you the ability to invest like you would in a mutual fund.”

One of Chenot’s clients has three children in college at the same time. They’ve saved $150,000 for school, but it still is not enough. That’s because college tuition costs in the U.S. have gone up 742% between January 1983 and August 2016, according to a report from J.P.Morgan Asset Management. By comparison, the price of gas has risen 82% in that same 33-year span.

Kids who went to college in the ‘80s and ‘90s are now the parents of today’s kids, and the college game has changed in a generation.

Steve Massey, a Financial Consultant with CAP COM Financial Services, said hundreds of families use his team’s 529 Plan services. While you can set up and manage your own 529 Plan at, some people prefer professional advice and assistance.

Massey said it’s best to start saving early – as early as a Social Security number is assigned -- and parents and teenagers need to have a conversation. “Understanding the costs and how they’re going to pay for college a few years in advance is really important,” he said.

Here are some 529 basics:

  • Congress created 529 plans in 1996 and named them after section 529 of the Internal Revenue code named “Qualified tuition program.”
  • Your earnings grow federally tax-deferred and qualified withdrawals are tax-free. In New York, you don’t pay any federal or state income tax on the funds you withdraw for qualified expenses.
  • New York taxpayers and 529 Plan account holders can deduct up to $5,000 on state income taxes annually ($10,000 for married couples filing jointly).
  • 529 Plans can pay for private secondary schools, trade and vocational schools, community college, public and private colleges and universities, and graduate school.
  • Grandparents can also set up 529 Plans with your children as the beneficiaries. If they are New York taxpayers, they can take the same state income tax deduction that you do.
  • You can continue to contribute and capture the tax savings all through the college years. “Saving doesn’t end when college starts,” Massey said. “You keep adding to it when your kids are in school.”

CAP COM Federal Credit Union also offers scholarships and awards (more than $70,000 in scholarships every year to its members), Home Equity Lines of Credit, and Academic Advantage Loans. CAP COM members also receive reduced rates on services from Dr. Dean Skarlis at The College Advisor of New York, Inc., helping you find the best college fit.



CAP COM Financial Services - Securities and annuities products offered through LPL Financial and its affiliates; Member FINRA/SIPC, a Registered Investment Advisor. CAP COM Financial Services is a division of CAP COM Federal Credit Union. CAP COM Financial Services and CAP COM Federal Credit Union are not registered broker dealers and are not affiliated with LPL Financial. Financial planning and insurance services offered through CAP COM Financial Services, LLC, a Registered Investment Advisor.</h6
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