By Arizona Treasurer Kimberly Yee
Featured in Arizona Parenting Magazine September Edition
While it may be hard to imagine now, before you know it, your child will be a high school graduate getting ready for college. As we all know, higher education is becoming more and more expensive, and that doesn’t seem to be changing anytime soon. Among the Class of 2021, college students graduated with an average of $36,140 in student debt. Now, many of these graduates may have to delay traditional milestones of adulthood like buying a home or saving for retirement because of daunting, burdensome student loan payments.
September is National College Savings Month, so right now is the perfect time to start saving for your child’s future education. The hardest part about saving is starting to save. As a parent, it’s easy to get wrapped up in science projects and soccer practices and put off or forget about planning for your kids’ future. But the sooner you start saving, the more savings you will have set aside for when your child graduates high school and pursues their next step in life.
Minimize Student Debt
Dedicated savings can help your student achieve their education and career training goals while minimizing the need for student debt. Children with college savings plans have higher college-going rates and are more likely to graduate from college than those with no savings. With a good financial plan, the opportunities for obtaining a quality education are endless, and this can start with opening an AZ529 Education Savings Plan.
Make Their Dreams a Reality
Arizona’s Education Savings Plan is a state-sponsored 529 Plan designed to provide a future student an opportunity to save for educational expenses in a tax-deferred manner. The AZ529 Plan isn’t just for college, but also for workforce training, apprenticeships, and K-12 education. A 529 Plan can be used for any level of education. AZ529 Plan savings can cover educational expenses including tuition and fees, books, equipment, and even up to $10,000 in student loans. Whether your student wants to study abroad one day, go to culinary arts school, or become a doctor, an AZ529 Education Savings Plan can help make their education dreams a reality. As a parent, you may not know what career your child will pursue one day, but you can be assured they will have the savings set aside to pursue their dreams.
As Arizona State Treasurer and the AZ529 Plan Administrator, I’m working to expand these opportunities for Arizona families to access higher education, from traditional college to vocational training and apprenticeships. Every child deserves the best education that positions them for success in life.
Start Saving Early
Starting off by saving small and saving regularly can pay-off big over time. For example, someone who saves $50 a month over a period of 18 years at 6% annual interest can accumulate $18,686 in funds. It’s important to begin saving for your child’s future education as soon as possible to maximize your savings and set them up for success.
Anyone Can Give
Plus, anyone can contribute to an AZ529 Plan. Parents can save for their children. Grandparents can save for their grandchildren. Aunts and uncles can save for their nieces and nephews. You can even save for yourself! A great way to start is to ask family and friends to give as little as $5 towards an existing AZ529 Plan for a Christmas or a birthday gift.
Saving with an AZ529 Plan comes with great tax benefits that families can use to their advantage. Beginning in Tax Year 2021, contributions to the AZ529 Plan can be deducted from your state income taxes up to $4,000 per beneficiary for a married couple filing jointly or up to $2,000 per beneficiary for single filers. The AZ529 Plan savings grow tax-deferred, and withdrawals are tax-free when used for qualified education expenses.
A History of Success
For over twenty years, the AZ529 Plan has been serving Arizona and has helped families save almost $2 billion for future educational expenses. The AZ529 Plan provides numerous options to lay the groundwork for jump-starting your child’s future education goals. So even when college or other post-high school pursuits are still years away, you can put in the time and effort now to set your child up for success.
You can open an AZ529 Plan today with as little as $15 a month. To learn more about the AZ529 Plan, please visit https://az529.gov.
Kimberly Yee is the Treasurer of Arizona and the Administrator of AZ529, Arizona’s Education Savings Plan.