Missouri treasurer visits SEMO to promote state's 529 education savings plan

Missouri Treasurer Vivek Malek stopped at Southeast Missouri State University on Tuesday, March 19, during his statewide tour to discuss the tax benefits of saving for education through the state’s 529 education savings plan.

Malek, a native of India and a SEMO alumnus, prioritized a stop at his alma mater to promote Missouri’s college savings plan MOST 529.

“For me, education has been the key to being who I am today,” Malek said. “I came to the United States with practically nothing, and whatever I am today, a big part of that is education.”

According to the U.S. Securities and Exchange Commission (SEC), a 529 is a “tax-advantaged savings plan designed to encourage saving for future education costs.” Malek described MOST 529 as a Swiss Army knife because of its ability to be used for multiple purposes in addition to college savings, including K-12 tuition, graduate school, trade and vocational school, registered apprenticeships and student loan repayment. If a child chooses not to go to college or vocational school and takes time away from the classroom, account holders have the option to withdraw the money with a 10% federal tax penalty, transfer the money to a family member, hold onto the money in case the child changes their mind down the road or pay off student loans.

“(It has) multiple uses. If a student is bright, got a scholarship and you’re not using all that savings, if the account has been in existence for 15 years, whatever savings you have up to $35,000, you can roll over into your Roth IRA, so it’s also a retirement tool,” Malek said. “As I mentioned, you can also utilize it to pay your tuition loans up to $10,000 in the lifetime of the account, which also reduces your interest-bearing cost on the loans.”

MOST 529 is marketed toward parents who are worried about saving for their child’s education. According to MOST 529’s website, the best strategy for saving is to simply start doing so. With an initial $5,000 contribution and a monthly investment of $100, the MOST 529 account can grow to $53,400 in 18 years, $31,300 in 12 years and $15,800 in six years, although actual market returns will fluctuate and aren’t guaranteed.

The program also offers tax advantages, including a state tax deduction for Missouri residents up to $8,000 per person or $16,000 if filing jointly with a spouse, tax-free withdrawals for qualified expenses, an $18,000 — or $36,000 if filing jointly with a spouse — annual gift tax exclusion and estate planning benefits for those who make five years worth of gifts in one lump sum.

Account holders can also benefit from the program’s features Ugift and Upromise. Ugift is a way for family members and friends to contribute to a MOST 529 account on birthdays, holidays and other celebrations. Gifting is free for the donor, there is no minimum gift amount required and contributions may be made both online or with a check. Upromise is a free service for account holders that provides opportunities for members to earn rewards for activities such as shopping, dining out and paying with a Upromise Mastercard. All rewards are automatically deposited as account contributions once the account holder reaches $50 in rewards.

For more information about the MOST 529 saving plan, visit www.Missourimost.org.