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Human Resources IU Human Resources

February 2018
HR Today

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Invest in the Future with a 529 Savings Plan

It’s America Saves Week (February 26 – March 3), an annual event co-sponsored by America Saves and the American Savings Education Council to promote good saving behaviors. This week is an ideal time for you to review your finances, set new savings goals, and set up a plan that will help you to save for what’s important to you.

If saving for education expenses is a priority, a 529 savings plan might be the right choice. Specifically designed for families to help save for future education expenses (and reduce reliance on student loans), these plans are administered by state agencies and organizations. The plans are free from federal income tax, and so are withdrawals when used for qualified education expenses, such as: tuition, computers, mandatory fees, books, supplies, certain room and board costs, and more.

529 savings plans are typically opened by parents and grandparents, but anyone who’d like to start saving for education expenses can open one. Anyone—grandparents, uncles, aunts, family friends, and more—can contribute to someone’s 529 plan and services like Upromise and Ugift make it easy to support someone’s future education needs.

For Indiana University families interested in saving for education, the IU Office of Financial Literacy has launched a new resource: This resource makes it easier to start saving by guiding you through some of the most common saving options available, and breaking down the process of choosing the right plan(s) for your needs. Different college savings plans are compared, including 529 plans such as Indiana’s CollegeChoice. The Financial Literacy team has pulled together research and resources to help you understand the pros and cons of each plan and make the best choice for your needs. will help you get started in selecting an educational savings plan, but you’ll need to talk to a financial advisor or tax professional to open a plan. When you’re ready to enroll in a plan, you’ll need the following information on-hand:

Once you’ve enrolled in a plan, it’s easy to set up a direct deposit from your paycheck right to your savings plan through IU Payroll. Learn how with this step-by-step flyer (PDF).

See how you can start saving today at America Saves and visit for helpful guidance on saving for education expenses.

Why Save with a 529 Plan?

529 plans are designed to help families set aside funds for future education costs. Here are some reasons why they’re a popular savings option:

  • They’re free from federal income tax.
  • Withdrawals are tax-free when used for qualified education expenses.
  • Some states, including Indiana, currently offer a state income tax credit on accounts.
  • There are low minimum contributions and high maximum contributions.
  • Anyone can open an account on behalf of a beneficiary, and anyone can contribute to the account.
  • IU employees have the option to set up contributions through IU Payroll direct deposit.

Visit to learn more about college savings plans.


Page updated: February 2018

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