Karen's Keynotes
by Karen Armstrong, Human Development Extension Agent
Rolette County

North Dakota’s 529 College Savings Plan

The cost of a college education is one of the most daunting financial burdens many parents face. Recent federal legislation has created several tax_favored incentives that will help lighten that burden. One particular program is known as the Section 529 Savings Plan or Qualified Tuition Program.

Section 529 Savings Plans are state sponsored mutual funds that are governed by section 529 of the Internal Revenue Service code. "Many financial planners think 529 savings plans for college could be as popular as the 401(k) is for retirement savings plan," says Debra Pankow, NDSU Extension Service family economics specialist. "All section 529 money used for higher education will grow tax deferred, and be exempt from federal income tax and, in many cases, state taxes when withdrawn."

North Dakota, along with other states, has adopted it’s own 529 savings plan, with the goal of assisting parents and students who are thinking of attending a higher education institution. "The State of North Dakota and the Industrial Commission in particular did an excellent job of sending out letters in September informing all citizens about the college savings plan.", says Pankow. " There are a lot of baby boomers who were raised in an environment where parents helped their children go to college. Their children are now approaching college age and the savings rate for Americans is at an all_time low. Today’s parents may not be able to afford lump_sum tuition payments at the same time they are faced with planning for their own retirement, so they are looking at alternatives such as the savings plan.

There are some guidelines. In North Dakota’s college savings plan, you may contribute as little as $25 a month, but to remain in the plan you must have contributed $300 the first year of your plan.

For a maximum, an individual could set aside up to $10,000 per year, and up to $20,000 for a married couple in a college savings plan. "It is important that everyone understands that the window of  opportunity is a ten year beginning in January 2002 to set aside money, and the beauty of the 529 savings plan is that you can use it for books, tuition, fees, and room and board.", Pankow says. "If you set aside money for a child and he/she doesn’t go to college you can choose another beneficiary. Anyone can be a beneficiary of  the account: a child, a spouse, a parent, a relative or anyone who plans to attend a post-secondary educational institution. There is no age limit restricting who may be a beneficiary. The money is  intended for higher education but there is a unique level of flexibility as to who can use the money, when they can use it and which  educational institution they attend."

With planning and careful consideration, a Section 529 Savings Plan may be the answer you have been looking for, Pankow says. Parents, grandparents and other relatives of pre_school and school aged children should consider the tax favored benefits offered by such plans.

If you are interested in the 529 College Savings Plan, contact your local extension agent or contact Debra Pankow, North Dakota State University Extension family economics specialist, at (701) 231_8593 for more details.

To receive an enrollment kit which includes an application call College Save at 1-866-728-3529, 7-6 p.m. Monday-Friday or contact your Morgan Stanley Financial Advisor.

Got Calcium

You no doubt you have heard “Got Milk” many times over through ads and commercials. It is true that milk consumption is important for good health. It can be a key source for important minerals of calcium and phosphorus. I will be presenting a spin-off  on that theme with “Got Calcium” at the Rolette Senior Citizens Center, 12 noon Wednesday, January 30th. The program will help participants understand their body’s calcium needs and how they can best meet these needs. Join us to learn about calcium and participate in a science experiment on calcium supplements. This program is open to anyone interested at no cost to participants.

Calendar

Jan.30 “Got Calcium”, 12 noon, Rolette Senior Citizens Center

30 “Making the Food Dollar Fit -Basic Budgeting,” 5:30 p.m., Fayes Albert Building, Belcourt

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Updated February 1, 2002 Shelley Armstrong Webmaster