Grandparents Helping the Next Generation Achieve Higher Education

published September 2, 2024

Grandparents play many important roles in the lives of their grandchildren. They are often active participants in their grandchildren’s upbringing, there for major milestones, and are steadfast supporters of their family’s hopes and dreams. To celebrate Grandparents Day, the Wisconsin College Savings Program and its direct-sold Edvest 529 College Savings Plan are learning how grandparents in Wisconsin are supporting the educational aspirations of their grandchildren.

Grandparents Choose Edvest 529 for Flexibility and Control

A recent survey conducted by Edvest 529 found that 90% of grandparents believe that helping pay for a grandchild’s college is one of the most important things they can do with their money. Grandparents in Wisconsin saving for a grandchild’s future education may choose to open an Edvest 529 plan because of the unique tax advantages, including a Wisconsin income tax deduction, tax-deferred growth on any earnings, and tax-free withdrawals for qualified educational expenses. Some opt to contribute to a grandchild’s existing Edvest 529 account to keep things simple, while others choose to open their own account because they prefer to maintain control of their funds, including how they are invested and when to make withdrawals for a grandchild’s education.

Generational Saving: A Recipe for Success

The Sadowski family of Pewaukee is one Wisconsin family that has seen first-hand the benefits of grandparents saving for education. Jim Sadowski explained that he and his wife, Vicki, were both first-generation college students who became High School teachers.

They valued education and wanted their own children to have the opportunity to pursue higher education. As parents, they saved a modest amount, but not enough to cover the full college costs for their children – a situation typical for many college savers. “And then the unexpected happened. My parents, who were in their 80’s at the time, said that they would pay for the tuition portion of the college experience for both of our children, allowing them to graduate debt-free!” said Mr. Sadowski. Realizing this was the best gift that could have been given to their children, Jim and Vicki pledged to do the same for the next generation.

Regular Savings from Grandparents are Adding Up

With the arrival of their own grandchildren, the Sadowski’s began acting on their commitment. The Sadowski’s have opened Edvest 529 accounts for each of them, and contribute monthly, without fail. "We investigated some of the many 529 state plans, but felt that as Wisconsin residents, Edvest 529 was the best for us. The Edvest plan has sound financial administration with investment options offered through TIAA. And, I’ll admit that, as an old, retired guy, the fact that our contributions could also serve as a Wisconsin state income tax deduction was the cherry on top."

When grandparents start college savings accounts at the birth of a grandchild, they can benefit from having the longest possible time horizon to save for college. The Sadowski’s have seen the benefit of regular saving and investing over time. “Our initial goal was to cover at least two years of each grandchild’s college tuition, but we now believe we will be able to cover the tuition for all four years.” This is a gift that is meaningful both to the grandchild and grandparents. For Jim Sadowski, the feeling of repaying the next generation with the gift his own parents gave more than 25 years ago can’t be overstated. "Today, as our first grandchild nears entry to college, we experience a great amount of satisfaction knowing that one of the legacies we will leave for our grandchildren is the ability to graduate from college debt-free. Just like our own children did. And what a tremendous gift that is for an adult child or grandchild."

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. 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 an Edvest 529 account owner(s), 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.

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