FRANKFORT, Ky.— The Kentucky Education Savings Plan Trust (KESPT) is encouraging families this tax season to take advantage of the tax-free growth opportunity that comes with a Kentucky 529 college savings plan account. Not only can earnings grow tax free in a KESPT account, but withdrawals are also tax-free when used to pay for qualified education expenses.
KESPT offers other advantages for Kentucky residents, too. An account can be started with as little as $25 and can be used at any qualified institution in the nation. Additionally, KESPT savings are not included in determining Kentucky need-based financial aid for beneficiaries of Kentucky residents. (However, other federal and institutional aid programs may take the amount in your account into consideration when determining eligibility so please check with your preferred institution and refer to the Plan Disclosure Booklet.)
“The cost of college continues to increase along with student loan debt for many families. Putting aside money in a 529 plan can help,” said David Lawhorn, KESPT program manager. “We encourage Kentucky families to start saving as early as possible. While families have many financial responsibilities, college remains a wise investment.”
College graduates may earn more over a lifetime, according to a 2015 study by the U.S. Bureau of Labor Statistics (Current Population Survey, 2015), a person with a bachelor’s degree earns a median income that is 68 percent higher than someone with a high school diploma. Over a 40-year career, the difference in earning potential can be more than $950,000. The difference is more significant for those who earn master’s, professional and doctoral degrees.
Parents can open a Kentucky 529 account by visiting kysaves.com and clicking the “Open an Account” button. While on the website, they can also invite family and friends to make secure contributions with KESPT’s eGifting feature. Funds may be transferred to another eligible family member if the beneficiary receives a scholarship or doesn’t need to withdraw the full amount saved.
For more information about KESPT and tax advantages, visit kysaves.com or call toll-free 1-877-598-7878. The plan is managed by TIAA-CREF Tuition Financing, Inc., a leader in 529 program management.