Treasurer pushes investment in state's 529 savings plan

Missourians can use a state savings plan to help pay for their children's college educations, and state Treasurer Clint Zweifel wants to make sure all state residents know the plan is available.

The Missouri Saving for Tuition - or MOST - program is a qualified tuition program established under Section 529 of the Internal Revenue Code.

The plan helps families and friends easily establish and contribute to a child's college savings fund, while offering tax advantages, a range of investment options and other benefits.

"Raising awareness of MOST 529 is important as families struggle with the rising costs of sending their kids to college," Zweifel said in a news release. "Saving now can keep the cost of that education at a more manageable level. It takes only a small investment of $25 to get started in MOST 529. With compounding, that small investment can have real results."

Compounding, which occurs when investment earnings are reinvested, enables more earnings over time. And the earlier investing begins, the higher the earnings potential.

As an example, Zweifel noted that if investments of $50 a month begin with a newborn, the account could accumulate $16,633 by the time the child is 18. That example, however, does not represent the return on any particular investment and does not reflect any taxes or penalties that may be due at distribution.

"This assumes a 5 percent annual return on a MOST account, but it underscores the importance of saving early," Zweifel said. "These seemingly small investments add up over time and make a real impact on a child's education."

According to www.treasurer.mo.gov, MOST accountholders are able to make deductions of up to $8,000 per year per taxpayer - or $16,000 when married filing jointly, from their Missouri income taxes. Contributions grow, free of federal and state income tax until they are withdrawn, and withdrawals for qualified higher education expenses also are exempt from federal and Missouri income taxes.

MOST offers age-based and individual options from Vanguard and American Century Investments, the release said, and in the first quarter of 2009, the plan was ranked among the Top 10 best performing 529 plans by Savingforcollege.com.[[In-content Ad]]