College Savings

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5+2+9 = A simple formula to help you save for college

May 06, 2013

As warm weather approaches, so do thoughts of your kids running home from school for the summer. When it's time for them to go to college, will you be running out of money to send them?

May 29, College Savings Day, provides the perfect opportunity to consider a 529 college savings plan to fund your children's higher-education expenses. These college savings plans are simple, flexible, and offer a range of investing options. You can invest in any state-sponsored plan—regardless of where you live or where your child goes to school—and possibly get a break on your state taxes along with federal tax benefits.*

Transfers made easy

If you already own a 529 plan account at another investment provider, you can transfer it to Vanguard easily, either online or with help from one of our education specialists. Visit our 529 section or call us at 866-734-4533.

The popularity of 529 plans has surged in recent years. An April 2013 report issued by independent fund rating firm Morningstar Inc. found that 529 plans across the industry had more than $166 billion under management as of Dec. 31, 2012—a 25% increase over 2011, and a 40% increase over September 2010.

Indeed, the tax benefits of 529 plans are available to a qualifying student's relatives, guardians, and friends, provided they have earned income. And of course, any earnings grow tax-deferred to maximize your investment dollars.

There's no time like the present

Why start now? Compound savings are a powerful tool and an early start means more time is on your side. Every dollar you save now is another dollar—or more—you could have when the tuition bell rings. And there are a variety of 529 plans available to suit your needs.

The Vanguard® 529 College Savings Plan is sponsored by the state of Nevada, but it's open to any investor. It offers three age-based investment options and 19 individual portfolios, as well as:

  • Simplified investing with an automatic savings plan.
  • Low costs and fees so you can keep more money for tuition and other education expenses.
  • Vanguard's experience as a leader with 28 direct-sold plans, and almost $45 billion in total managed assets.

Looking for other options? Many state-sponsored plans offer Vanguard investments and can be opened with as little as $25, such as the College Savings Iowa® 529 Plan, New York's 529 College Savings Program Direct Plan, and MOST—Missouri's 529 College Savings Plan.

Need to do a little homework? Visit our 529 page to learn the basics and use our interactive planning tools to explore your options and determine your savings goals and costs. Or simply call a Vanguard education specialist at 866-734-4533. We'll help you learn the ABCs of 529s and get your children on track to meeting their college needs.

* The availability of tax or other benefits may be contingent on meeting other requirements.

Notes:

  • All investments are subject to risk, including the possible loss of the money you invest.
  • For more information about The Vanguard 529 College Savings Plan, call 866-734-4533 or obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor and Underwriter.
  • For more information about any 529 college savings plan, contact the plan provider to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. If you are not a taxpayer of the state offering the plan, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Vanguard Marketing Corporation serves as distributor and underwriter for some 529 plans.
  • If you are not a Nevada taxpayer, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.
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