Edvest 529 Account Owner Spotlight: Multiple Perspectives on College Savings

published August 26, 2024

The importance of planning for a child's future education cannot be overstated, and for many Wisconsin families, the Edvest 529 College Savings Plan has proven to be a valuable tool. Today, we spotlight three Wisconsinites who are saving for their families with this program: Jacob Martinez from Racine, Kimberly Hazen from Madison, and Dr. Jim Fisher from Pewaukee. Through their stories, we see the impact of early, strategic, and consistent saving for higher education.

Jacob Martinez: Stability Through Early Planning

Jacob Martinez, a dedicated father from Racine, Wisconsin, started an Edvest 529 account for his daughter, Sol, as soon as he and his wife learned they were expecting. "Opening the account and getting it started was super easy," Jacob recalled. "It took less than an hour and was very straightforward."

The attraction to a 529 savings plan was its specific design for education. "Our strategy was to fund the 529 plan with as much extra money as we could every month, and then to have family and friends contribute as needed, like for birthdays and other special occasions," Jacob explained. Contributions came from his parents and Sol's aunts, uncles, and cousins.

Jacob's goal is for their savings in the 529 plan to cover all of Sol's tuition and expenses by the time she is ready for college. She is only two years old, but they are on the right path. His advice to other families is clear: "Open a 529 plan as soon as possible and just contribute what you can over time. Saving for college doesn't have to be stressful; it can be easy." For him and his family, one word that describes the Edvest 529 plan is "stability" due to ensuring that there are dedicated funds set aside for Sol's future educational needs.

One helpful tip Jacob shared is that parents can open an account and start saving, even before their child is born. An expecting parent can open an account for themselves, and then switch the beneficiary into the child's name after the baby is born. This allows families to start saving as early as possible, making an impact in the long run.

Kimberly Hazen: Freedom to Focus on Education

Kimberly Hazen, from Madison, Wisconsin, is using the Edvest 529 plan to save for her nephew, great-niece, and great-nephew. "I started saving when [they were] born," Kimberly said. "Rather than giving them gifts that might end up in a landfill, I wanted to give them something meaningful."

The simplicity of setting up the accounts and the ability to involve other family members were major advantages. "For Wisconsin, [contributing to Edvest 529 is] a tax-deductible contribution, which is really nice," she noted. Kimberly appreciated the control the 529 plan provided, ensuring that the funds were used solely for educational purposes. "I believe in advanced education and wanted to ensure the money was channeled into advancing their skills and knowledge."

Kimberly's strategy involves consistent contributions for birthdays and holidays. To make these gifts more "real," her nieces and nephews have each received a wrapped gift of a printed chart showing an example of how funds can grow with compounding interest. This helps them see the power of early saving. Her advice to others is to start saving early and automatically, so it becomes a seamless part of budgeting. For Kimberly, one word that describes the Edvest 529 plan is "freedom" from her nieces and nephews having potential student loan debt.

To encourage other family members to join in the educational savings, Kimberly has challenged her niece's and nephew's parents to make contributions, which she offered to match up to $500 per child one year. This collaborative approach not only boosts their savings, but also teaches the children the importance of investing in their education.

Dr. Jim Fisher: Long-Term Growth and Benefits

Dr. Jim Fisher, a retired professor from Pewaukee, Wisconsin has been saving for his son and grandchildren for over 22 years using the Edvest 529 plan. "I started shortly after they were born and took advantage of the tax benefits," he shared.

Jim's extensive background in accounting and finance made him appreciate the advantages of a 529 plan. "The ability to save and invest money with the earnings growing tax-deferred is huge," he emphasized. Over the years, the investments in his 529 accounts have yielded substantial growth. He emphasized the tax benefits that an Edvest 529 account offers by adding, "I would suggest getting started as early as you can, because every year that money is [in your account], tax-free earnings [on qualified higher education expenses] can be less money that you're going to have to put into those accounts over the long term."

Jim's strategy involved contributing up to $3,000 annually per account, taking full advantage of Wisconsin's income tax deduction at the time. Currently, Jim has two grandchildren attending college with support from the 529 accounts, and a son planning to return to school in the fall. "At the beginning of each month, I transfer funds to cover rent and food, and at the start of each term, I pay for fees and tuition," he explained. In the future, if there are funds that a beneficiary will not need for their education, Jim plans to utilize the option to roll over up to $35,000 into a Roth IRA for each beneficiary, as a way to encourage their saving and investing.¹

For Jim, the Edvest 529 plan can be summed up with the word, "wow" due to the impressive growth and tax benefits he has experienced. His disciplined approach and strategic investments have set a strong financial foundation for his family's educational aspirations.

Inspiring Stories of Success

The experiences of Jacob, Kimberly, and Dr. Jim highlight the profound impact of the Edvest 529 College Savings Plan. Their stories demonstrate the value of early, strategic, and consistent saving for higher education. Each family's journey underscores the importance of planning ahead to provide children and grandchildren with the best opportunities for their futures.

Thank you, Jacob, Kimberly, and Dr. Jim, for sharing your inspiring stories with Edvest 529! Your experiences highlight the profound impact of early, strategic saving for educational and career success.

We Want to Hear Your Story

Are you an Edvest 529 Account Owner with a story on how saving for college has impacted your child or grandchild's life? We want to hear and share your story! Email Chelsea Wunnicke at chelsea.wunnicke@dfi.wisconsin.gov or Cheryl Rapp at cheryl.rapp@dfi.wisconsin.gov, with your story, and we will be sure to reach out.

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To learn more about Wisconsin's Edvest 529 College Savings Plan, its investment objectives, risks, charges and expenses see the Plan Description at Edvest.com before investing. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. Wisconsin taxpayers can qualify for a 2024 state tax deduction up to $5,000 annually per beneficiary, for single filer or married couple filing a joint return, from contributions made into an Edvest 529 College Savings Plan. Married couples filing separately may each claim a maximum of $2,500. Prior to investing, check with your home state to learn if it offers tax or other benefits such as financial aid, scholarship funds or protection from creditors for investing in its own 529 plan. Consult your legal or tax professional for tax advice. If the funds aren't used for qualified higher education expenses, a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Consult your legal or tax professional for tax advice. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributor and underwriter for the Edvest 529 College Savings Plan.

This testimonial was provided by Edvest 529 account owners, and no direct or indirect compensation was given in return. No material conflicts of interest exist on the part of the account owner(s) giving the testimonial, resulting from their relationship with TIAA-CREF Tuition Financing, Inc. Results experienced by the account owner(s) may not be representative of the experience of another/other account owner(s), and there is no guarantee of future performance or success.

Footnotes

1. ¹Funds rolled over to a Roth IRA can be withdrawn free from federal and Wisconsin income tax. If you are not a Wisconsin taxpayer, these withdrawals may include recapture of tax deduction and state income tax. Account Owners and Beneficiaries should consult with a qualified tax professional before rolling over funds from their 529 plan to contribute to a Roth IRA. $35,000 is the lifetime maximum per beneficiary for 529 plan rollover contributions to ROTH IRA's. You can only transfer up to the annual ROTH IRA contribution limit each year, so a $35,000 rollover would need to be completed over several years. Rollovers are subject to additional rules and eligibility requirements.↩

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