ScholarShare: What You Need to Know

College is expensive, but you don’t have to be a millionaire to help your kid through it. With ScholarShare, saving for college becomes worlds easier. This special plan can make your money work for you better than any other regular savings account. Why not start investing in your child’s future today?

What Is ScholarShare?

ScholarShare 529 is an investment plan that helps you save for college. Open yours today and start making contributions quickly and easily. Once your child or grandchild goes off to school, they can spend the money you’ve accrued on qualified education expenses.

Because this 529 account is offered by the state of California and managed by a TIAA-CREF Tuition Financing Inc (TFI) program, you know your investment is in good hands.

How Does ScholarShare 529 Work?

In sum, ScholarShare 529 puts your money into different investment options to grow your savings. Then, when your child has graduated from K 12, they can spend it on higher education expenses. This includes not only tuition but also textbooks, school fees, and room and board.

Moreover, your child may still be eligible for state benefits such as financial aid scholarship funds despite having this account. Declaring a 529 easily on the FAFSA application forms is very straightforward.

Who Can Sign Up for a 529 Plan?

Don’t be fooled by the name. California’s ScholarShare 529 Savings Plan account is open to all citizens and taxpayers in the United States. You don’t have to be a California State resident to open a 529. As long as you have a social security number, you can invest in your child’s future with ScholarShare.

On top of that, your child does not have to attend a California school to withdraw their savings either. Enrollment in any state’s qualified tuition program is all they need to access funds.

How Do I Withdraw Money from ScholarShare?

Withdrawing money for qualified expenses is easy with ScholarShare 529. Go to the web site and log into the account as the account owner. Then, select the “withdraw” option and select what beneficiary bank account you would like to send that money to.

Do keep in mind that there are penalties for not spending your money on qualified expenses. Your earnings may be subject to an additional federal income tax and California state tax, as this is strictly an educational savings account.

Why Choose ScholarShare?

There are many 529 plans sponsored by different states and institutions. Which one you choose is up to you. There is a lot of information to read and consider, so you need to do your research.

Yet, we can highlight three aspects that make California State’s ScholarShare 529 College Savings Plan better than most—and why it might be the best choice to help you save for college.

100% Tax-Free Growth

Any earnings you get from ScholarShare 529 plans are free from federal income tax and state tax. That means your child gets to keep all the funds from their account.

With time, that adds up! When you put your money into a ScholarShare 529 account, you can have up to 25% more than if you had stashed it in a regular taxable savings account. This is what makes this plan such a good idea for your child’s future.

Tax-Free Contributions

On top of that, ScholarShare 529 College Savings Plans give tax benefits to anyone gifting money into the account. Account owners, friends, and family can make contributions and not worry about the federal gift tax or “kiddie tax.” Plus, there are other estate tax benefits, too.

To make the most of these perks, be sure to get personalized tax advice and information from your legal or tax professional.

Low-Cost and Low Fees

ScholarShare 529 beats all others because of its low cost and low fees. Most plans out there (e.g. Rowe Price College Savings, New York’s Direct Plan Account, and so on) eat away at your hard-earned savings through pesky fees. But ScholarShare 529 plan is a much more affordable option.

Besides, you can start contributing with as little as $25. Unlike other 529 plans, you don’t need to commit huge amounts to your child’s ScholarShare 529 account. Instead, little by little, you can give them a healthy financial head start.

Smart Investment Tools

ScholarShare 529 has plenty of investment options for you to choose from. You can pick age-based options, such as the Enrollment Year Investment Plan, so your savings grow safely and flexibly alongside your child. Or, after you consider it carefully, design your custom investment portfolio.

You can find out more about investment objectives, risks, charges, expenses, and more information about the ScholarShare 529 plan here. Whichever investment path you follow, you can rest assured your child’s future is already looking brighter.