Messmer Column: Saving for Higher Education

Local Sources- On this weeks' Messmer Column, State Senator Mark Messmer (R-Jasper) discusses saving for Higher Education.  

Saving for education after high school can seem like a daunting task, but more Hoosiers are realizing the viability of doing so through CollegeChoice 529 Savings Plans. This week, Treasurer of State Kelly Mitchell announced that the state's CollegeChoice CD Savings Plan has reached a high water mark, with $20 million in total ready to be spent on education.

This is an encouraging sign for the future. Postsecondary education is vital for many career paths, and more families are starting to save early on through these special tax-advantaged investment plans.

The benefit of a 529 plan is that your investment goes further than a standard savings account. Investments can grow free of federal and state taxes when the money is used to pay for qualified education expenses like tuition, books, computers and fees. These funds can be used at any eligible school or apprenticeship program, both in- and out-of-state, providing families with a number of options.

Taxpayers who save for education using a 529 plan also receive state tax credits. Currently, that credit is 20% of your yearly contributions to a CollegeChoice 529 account, up to $1,000. However, to further incentivize these plans, the General Assembly passed legislation this year to increase that cap to $1,500. This new higher cap will be applied when filing your 2023 taxes.

This twofold benefit makes saving for education expenses a much more financially viable option. 

You can open a CollegeChoice 529 account with as little as $10 a month with recurring contributions or a one-time opening contribution of $10. You can also set up payroll deduction through a participating employer with a $10 minimum per pay period.

It is never too late to start saving for the future, so I encourage all Hoosier families to look into this resource. To learn more, visit CollegeChoiceDirect.com.

As always, feel free to contact my office directly with your questions or concerns at [email protected] or by phone at 800-382-9467.