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College Savings and The TNSTARS College Savings 529 Program.

College Savings
College SavingsDeMaria Financial Services

The TNStars College Savings 529 program is a great, low cost way to begin saving for college. I am personally enrolled in order to prepare for my childrens' college education expenses and feel the need to share this opportunity. The program offers 14 different investment options including a First Tennessee Interest Bearing Account Option for those who are risk averse. The plan also has age based allocations options for individuals that don't want to spend a lot of time deciding which account option to select. There are also some great incentives to help people take the first step in preparing for college education expenses.

Tennessee residents/taxpayers are eligible for a $100 match for an initial contribution of at least $100 until June 30, 2014. To make it even better, there is also a $50 match for setting up automatic contributions from a checking or savings account. There is also a $100 incentive for transferring from another 529 plan just in case you've already begun saving for college in a different 529 plan. This is a great opportunity for people wanting to save for college and besides, who wouldn't want to see a portion or all of their initial contributions matched by the plan.

Just to give you an idea of how the plan can help, take a look at the following example. Consider a $150 dollar initial contribution where you received the $100 match and an extra $50 for setting up automatic contributions of $25 per month. Your beginning investment amount would be $300. If we assume an 8% return, this could potentially grow to $15,715 over a 20 year period. Not too shabby if you ask me. If you would like to use a simple calculator to estimate how much you need to save, feel free to use the following website. http://demariafs.com/Calculators.html and select either the “savings calculator” or “deposits needed to accumulate a future sum”.

A little more about the plan.

Recognizing the need for a highly skilled workforce and the role that higher education plays in achieving that goal, the State of Tennessee has developed the TNStars College Savings 529 Program, a program of the Tennessee Treasury Department.
The TNStars College Savings 529 Program is Tennessee’s own 529 program, a program that is designed to make college savings easy. The program offers parents and other relatives a low-cost way to save for children’s college expenses with attractive investment options and special tax advantages.
The plan offers an age-based track where the allocation becomes more conservative as the child approaches college. The plan also offers individual investment options including both domestic and international equities, balanced fund options, fixed income options, and an FDIC insured option. The underlying funds for each of the options are from a range of Fund Companies including Vanguard, DFA, Primecap, Maxim and First Tennessee Bank. The program offers the products at a competitive fee of 35 basis points.

Plan Highlights

  • Low fees that are on par with the top-rated plans in the nation.
  • 14 self-selecting investment options and an aged-based option covering a wide array of investment strategies.
  • Federal tax-free earnings if the money is used for higher education expenses.
  • Availability to anyone regardless of income level. Parents, grandparents, aunts, uncles, and friends can open accounts on behalf of children.
  • Contributions qualify for a $13,000 annual federal gift tax exclusion. Also, a lump sum of $65,000 may be contributed to a 529 plan and treated as if it were made over a five-year period to completely avoid the federal gift tax.
  • Plan contributions aren’t considered to be a part of an estate for federal tax purposes. Account owners still retain control of the accounts, but do not pay federal estate taxes on the value of the accounts. But if a gift is spread over five years and the account owner passes away within the five years, a portion of the gift will be included in the estate.
  • Quality customer service

May 29th 2014 is the official TNSTARS 529 Day and there are many discounts available on their site including the Knoxville Zoo, Adventure Science Center, and the Creative Discovery Museum. At DeMaria Financial Services, we would like to offer a complimentary college planning consultation to assist you with getting started with your college planning needs.

If you like this article and would like to be notified of future Knoxville Investing Examiner articles, please click the confidential “Subscribe” button above this article. Enter your email address and upcoming article links will be sent to you at no cost. Christopher DeMaria also serves the Knoxville area through DeMaria Financial Services. Call today (865-332-5952) to schedule an appointment or to reserve a seat at our next complimentary educational seminar.
The information contained in this report or information provided does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation of an offer to buy or sell any security referred herein. Past performance may not be indicative of future result. No buy or sell orders may be given using the email, please call the above number to contact your Advisor. Christopher DeMaria is registered with and securities offered through Kovack Securities, Inc. Member FINRA/SIPC. 6451 N. Federal Highway, Ste 1201, Fort Lauderdale, FL 33308 (954) 782-4771. Investment Advisory services are offered through Kovack Advisors, Inc. DeMaria Financial Services is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc