The Show-me State is now showing you the money. On March 1st Missouri became the 12th state to offer matching funds to participants in the state’s 529 plan. www.most529grant.org
The match is dollar for dollar up to $500 a year, for a maximum benefit of $2,500 over the lifetime of the account.
It’s not widely known that some states offer matching 529 grants. How does it work? Think of it like your employer providing matching funds to your 401-k plan. States are doing this to encourage people to start saving for college when their children or grandchildren are young.
Participation in the matching grant programs may be subject to income limits, funds availability and age requirements. But it’s certainly worth looking into.
To see if your state offers matching funds for 529 plan click here
What is a 529? 529s are named after a section of the US Internal Revenue Code. The plans allow someone to tuck money away for college in an account that grows tax-free. Many states offer other tax incentives including tax deductions or credits.
There are two kinds of 529 accounts. A 529 prepaid tuition plan and a 529 savings plan. The tuition plan allows you to buy tuition credits at today’s rates for use sometime in the future. The 529 savings account is an investment account, usually a portfolio of mutual funds. The value will rise and fall with the stock markets.
Category: Money Matters