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TN 529: A Powerful Investment for Tennessee's Future

TN 529 is Tennessee's official 529 college savings plan, offering a tax-advantaged way to save for a child's future education. With flexible investment options and generous tax benefits, TN 529 is an ideal tool for families who want to make the most of their college savings.

Tax Advantages of TN 529

Federal Income Tax Exemption: Earnings from TN 529 accounts are free from federal income tax when used to pay for qualified education expenses.
Tennessee State Income Tax Credit: Tennessee residents receive a state income tax credit of up to $1,000 per year for contributions to a TN 529 account.

These tax benefits make TN 529 an attractive option for families who expect to pay higher taxes in the future.

Investment Options

TN 529 offers a variety of investment options to meet the individual needs of families. These options include:

Age-Based Portfolios: These portfolios automatically adjust the allocation of assets based on the child's age, becoming more conservative as they get closer to college.
Static Portfolios: These portfolios maintain a fixed asset allocation, allowing families to choose a level of risk that is appropriate for them.
Custom Portfolios: Families who want more control over their investments can create a custom portfolio that meets their specific goals and risk tolerance.

Benefits of TN 529

Tax Savings: The tax advantages of TN 529 can save families thousands of dollars in taxes over the life of the account.
Flexibility: TN 529 funds can be used to pay for a variety of qualified education expenses, including tuition, fees, room and board, and books.
Control: Families have complete control over their TN 529 account, allowing them to invest according to their own goals and risk tolerance.

Why TN 529 Matters

According to the College Board, the average cost of tuition and fees at a four-year public college has increased by over 250% since 1985. As the cost of higher education continues to rise, it is more important than ever to start saving early for a child's future education. TN 529 provides families with a powerful tool to save for college and reduce the financial burden of higher education.

tn 529

Strategies for Maximizing TN 529

Start saving early: The sooner you start saving, the more time your money has to grow through compound interest.
Contribute regularly: Even small contributions made on a regular basis can add up to a significant amount over time.
Consider automatic contributions: Setting up automatic contributions from a checking or savings account makes saving for college a painless process.
Take advantage of tax credits: Tennessee residents can take advantage of a state income tax credit of up to $1,000 per year for contributions to a TN 529 account.
Invest for the long term: Historically, stocks have outperformed other asset classes over the long term. Consider investing in an age-based portfolio or custom portfolio that includes a mix of stocks and bonds.
Rebalance your portfolio: As your child gets closer to college, you may want to rebalance your portfolio to become more conservative. This will help to protect your savings from market volatility.
Don't withdraw funds for non-qualified expenses: Withdrawals from TN 529 accounts for non-qualified expenses are subject to federal income tax and a 10% penalty.

Tips and Tricks for TN 529

Open an account for multiple children: You can open a separate TN 529 account for each child in your family.
Use TN 529 for private school expenses: TN 529 funds can be used to pay for tuition and fees at private schools, including K-12 and college.
Consider a 529 savings plan from another state: If you are not a Tennessee resident, you may want to consider opening a 529 savings plan from a state that offers more generous tax benefits.

Conclusion

TN 529 is a powerful investment tool that can help families save for a child's future education. With its flexible investment options and generous tax benefits, TN 529 is an ideal way to make the most of your college savings. To learn more about TN 529, visit the website of the Tennessee Higher Education Commission at www.tn.gov/thec.

Additional Resources

Tennessee Higher Education Commission: https://www.tn.gov/thec
TN 529 Program: https://www.tn529.com
College Savings Plans Network: https://www.collegesavings.org
Saving for College: A Guide for Families: https://www.savingforcollege.com

Table 1: TN 529 Contribution Limits

Contribution Type	Limit (per beneficiary)
Annual Contribution	$10,000
Lifetime Contribution	$500,000

Table 2: TN 529 Investment Options

Investment Option	Description
Age-Based Portfolios	Automatically adjust asset allocation based on child's age
Static Portfolios	Maintain a fixed asset allocation
Custom Portfolios	Families can create a portfolio that meets their specific goals and risk tolerance

Table 3: TN 529 Tax Benefits

Tax Type	Benefit
Federal Income Tax	Earnings exempt from tax if used for qualified education expenses
Tennessee State Income Tax	Up to $1,000 tax credit per year for contributions

Table 4: Strategies for Maximizing TN 529

Strategy	Description
Start saving early	The sooner you start saving, the more time your money has to grow
Contribute regularly	Even small contributions made on a regular basis can add up to a significant amount over time
Consider automatic contributions	Setting up automatic contributions from a checking or savings account makes saving for college a painless process
Take advantage of tax credits	Tennessee residents can take advantage of a state income tax credit of up to $1,000 per year for contributions to a TN 529 account
Invest for the long term	Historically, stocks have outperformed other asset classes over the long term
Rebalance your portfolio	As your child gets closer to college, you may want to rebalance your portfolio to become more conservative