Every dollar saved can make a difference for the future. With the DC College Savings Plan, you can help your investment go even further, thanks to tax-deferred earnings and the power of compound interest. The sooner you start saving, the more time your money has to potentially grow.
The DC College Savings Plan sponsored this article.
Saving now can save you later
With so much going on day-to-day, preparing for future education costs may not always be top of mind. Saving more today may mean borrowing less in the future. To make the most of your DC College Savings Plan account, consider starting early and saving consistently.
Consider establishing recurring contributions or payroll direct deposits to make saving automatic. Even small contributions made on a regular basis have the potential to add up over time.1
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The chart above shows an example of what it could look like if you began to save $50 a month when your child was one year old (with an initial contribution of $250). Assuming a 5% rate of return compounded daily, the account could potentially grow to $16,494 by the time your child is college age.2
Setting you up for success
The DC College Savings Plan makes it easy for you to get started—and keep going. It only takes 10 minutes and $25 to open an account online.
- Flexible investment options allow you to choose what works best based on your comfort with risk and time until enrollment.
- Potential earnings grow tax-deferred, and you can make tax-free withdrawals for qualified educational expenses.³
- DC taxpayers are eligible for a special tax deduction of up to $8,000 for married couples or domestic partners filing jointly, who have separate accounts ($4,000 for individuals).4
The best time to start saving is now
Your child has big dreams. The DC College Savings Plan can help them come true.
Enroll online today or learn more about the DC College Savings Plan.
Do not wait — the sooner you start, the more your savings can potentially grow.
1 A plan of regular investment cannot assure a profit or protect against a loss in a declining market.
2 The hypothetical example assumes college begins at age 18 and is for illustrative purposes only. It does not reflect an actual investment in any particular 529 plan or taxes, if any, payable upon distribution.
3 Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes and recapture of DC tax deductions. Tax and other benefits are contingent on meeting other requirements and certain withdrawals are subject to federal, state, and local taxes.
4 Contributions by DC taxpayers in excess of the annual limit may carry forward the excess of five (5) years and may be deducted in future years on their DC tax return. If a participant makes a non-qualified withdrawal or a transfer/rollover to another state’s program within two (2) years of opening the account, the amount of the deduction is “recaptured” and must be included in the participant's District of Columbia income.
Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program.
For more information about The DC College Savings Plan ("the Plan"), call 800-987-4859, or visit www.dccollegesavings.com to obtain a Program Disclosure Booklet, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.
The Plan is administered by the District of Columbia Office of the Chief Financial Officer, Office of Finance and Treasury. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-to-day operations including recordkeeping and administrative services. Ascensus Investment Advisors, LLC, serves as the Investment Manager.
The Plan's Portfolios invest in: (i) exchange-traded funds, (ii) mutual funds and (iii) a funding agreement. Investments in The Plan are municipal securities that will vary with market conditions. Investments are not guaranteed or insured by the Government of the District of Columbia, the District of Columbia College Savings Program Trust, the District of Columbia Chief Financial Officer, the District of Columbia Treasurer, the Trustee for the District of Columbia College Savings Program Trust or any co-fiduciary or instrumentality thereof, the Federal Deposit Insurance Corporation or any instrumentality thereof.
INVESTMENTS ARE NOT FDIC INSURED, MAY LOSE VALUE AND ARE NOT BANK GUARANTEED.
