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In Stressful Times It Pays To Have a Plan

 
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In Stressful Times It Pays To Have a Plan -- A 529 College Savings Plan
By: Sandra Liggett, JD, Chair, Education Trust Board of New Mexico
Ted Miller, Executive Director of the Education Trust Board of New Mexico
We have all had our lives disrupted in the last few months, and felt the stress that
accompanies that disruption. While our personal lives and the economy have been
disrupted, it is also the case that nationally we have increased our savings rate. This is
a reaction to the financial risks we perceive around us. This is a good first step – but by
itself it is not a financial plan.

A financial plan involves setting goals for our current needs and for the future.
Developing a financial plan and acting on it can help us reduce stress by reducing
uncertainty.

A good financial plan is especially important when it comes to funding higher education
and reducing student loan debt -- two of the biggest financial challenges families will
face in their lifetimes.

More than two decades ago the state of New Mexico created a plan, called The
Education Plan, which is a 529 college savings plan designed to help people save for
the long-term goal of funding higher education. It is among the lowest cost 529 plans in
the country.

The Education Plan can be used to pay for a wide variety of expenses such as tuition
and fees, room and board, books and supplies, necessary computer equipment and
software, and special needs equipment. It can be used to pay for these expenses at
schools nationwide – including community colleges, four-year schools, trade schools
and professional and graduate schools.

The Education Plan offers a variety of investments, including year of enrollment
portfolios. These portfolios are designed to maximize investment returns in the earlier
years and become more conservative as the time nears to use the funds.

The federal government has encouraged the growth of 529 plans by giving them tax
advantages -- such as no tax on earnings growth, and no tax on withdrawal as long as
the money is used to pay for higher education expenses.

New Mexico also provides a tax benefit for The Education Plan. New Mexico taxpayers
can deduct the full amount of any contributions that are made to the New Mexico plan
and used to pay for higher education expenses.

The Education Plan is a great way to save for higher-education expenses and to reduce the burden of student loan debt. It’s easy to set up a plan. It takes about 15 minutes. An account can be opened for as little as $1, and contributions can be made at any time in any amount. 

Having a financial plan now for future higher education expenses can help us feel better
about today and the future.

 

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The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

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Phone: 1-877-337-5268
We're available Monday to Friday 8 a.m. to 7 p.m. MT

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For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The Education Plan is administered by The Education Trust Board of New Mexico. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-today operations, including investment advisory, recordkeeping and administrative services. The Education Plan’s portfolios invest in: (i) mutual funds; (ii) exchange traded funds; and/or (iii) a funding agreement issued by New York Life. Investments in The Education Plan are not insured by the FDIC. Units of the portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the portfolios you choose. You could lose all or a portion of your money by investing in The Education Plan depending on market conditions. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

Ugift is a registered service mark of Ascensus Broker Dealer Services, LLC.

The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

All other marks are the exclusive property of their respective owners.

Not FDIC-Insured. No Bank, State or Federal Guarantee. May Lose Value.