Open a NY 529 Plan for Your Own Education
The NY 529 plan, or New York’s 529 College Savings Program Direct Plan is an excellent choice for New York residents. If you are not a resident of New York State and pay taxes in another state, your best bet is to compare the NY 529 plan with the plan that your own state offers. Your state’s 529 plan may have tax advantages that you cannot access through this Program. For New York State taxpayers, deductions up to $5,000 of contributions are allowed on tax returns. For married couples who file jointly the deduction limit is $10,000. Withdrawals from the fund are exempt from New York State income tax if the money is used for qualified education expenses.
It’s easy to open a NY 529 plan. You can start with $25 and continue contributions by check, automatic investment, electronic bank transfer, or payroll deduction. You can also transfer assets from other college savings plans. The only fee is a small a management fee of 0.49 percent. The maximum balance per beneficiary is $375,000. The beneficiary can be your child, a relative, or even yourself if you have plans to return to school.
Regarding who can invest in a NY 529 plan, the doors are open to citizens and resident aliens. All you need is a valid social security number or taxpayer identification number and a permanent U.S. address. Eligible expenses include tuition, fees, books, certain room- and-board expenses, and supplies. The school needs to be a post-secondary school which can be in the United States or abroad. For 2010 eligible expenses cover computer technology and equipment, Internet access and related services.
There are 16 investment options by Vanguard and you can choose up to five investment options. The options are age-based, individual portfolio, or price and performance based. Vanguard has been in the investment business since 1975 and has a reputation for value, client focus, and low operating costs.