529 Missouri: Unlock Your Child's College Dreams

Missouri's State-Sponsored 529 Plan

Missouri offers a 529 plan, known as MOST 529, which is designed to help families save for future college expenses. The plan offers a variety of investment options and tax benefits that can make saving for college more affordable.

As of 2023, there are over 292,000 MOST 529 accounts with a total of over $8.3 billion in assets. This makes MOST 529 one of the largest and most popular 529 plans in the country.

Benefits of a 529 Plan

There are many benefits to saving for college with a 529 plan, including:

• Tax-free growth: Earnings on investments in a 529 plan grow tax-free, both at the state and federal level. This can make a big difference in the long run, as the power of compounding interest can help your savings grow faster.
• Tax-free withdrawals: Withdrawals from a 529 plan are tax-free if they are used to pay for qualified education expenses, such as tuition, fees, and room and board.
• State income tax deduction: Missouri residents who contribute to a MOST 529 plan may be eligible for a state income tax deduction of up to $8,000 per year.
• Flexibility: 529 plans offer a variety of investment options, so you can choose a plan that meets your risk tolerance and investment goals.

How to Open a MOST 529 Account

Opening a MOST 529 account is easy. You can open an account online, by phone, or by mail. You will need to provide some basic information, such as your name, address, and Social Security number. You will also need to choose an investment option and make an initial deposit.

Investment Options

MOST 529 offers a variety of investment options to choose from, including:

• Age-based portfolios: These portfolios are designed to automatically adjust the asset allocation based on the beneficiary's age. This can help ensure that your investments are aligned with your child's changing needs.
• Target-date portfolios: These portfolios are designed to reach a specific target date, such as the year your child will graduate from college. The asset allocation of these portfolios will gradually become more conservative as the target date approaches.
• Index funds: These funds track a specific market index, such as the S&P 500. Index funds are a low-cost way to invest in the stock market.
• Bond funds: These funds invest in bonds, which are loans to corporations or governments. Bond funds are a more conservative investment option than stock funds.

Fees

MOST 529 charges a variety of fees, including:

• Annual administrative fee: This fee is charged to cover the costs of administering the plan. The annual administrative fee is 0.25% of the account balance.
• Investment management fee: This fee is charged to cover the costs of managing the investments in the plan. The investment management fee varies depending on the investment option you choose.
• Other fees: There may be other fees associated with MOST 529, such as account closure fees and wire transfer fees.

How to Withdraw Funds

To withdraw funds from your MOST 529 account, you will need to submit a withdrawal request to the plan administrator. The plan administrator will review your request and, if approved, will send you a check or direct deposit the funds to your bank account.

Other Considerations

There are a few other things to consider when saving for college with a 529 plan:

• Contribution limits: There is an annual contribution limit of $15,000 per beneficiary for MOST 529. However, Missouri residents may contribute up to $8,000 per year without claiming a state income tax deduction.
• Gift tax implications: Contributions to a 529 plan are considered gifts for federal gift tax purposes. The annual gift tax exclusion is $15,000 per recipient. If you contribute more than the annual gift tax exclusion, you may be subject to gift tax.
• Estate tax implications: 529 plans are not subject to estate tax if the account owner dies. However, the value of the account may be included in the account owner's estate for federal estate tax purposes if the account owner dies within five years of making a contribution.

Conclusion

Saving for college with a 529 plan can be a great way to reduce the cost of higher education. The MOST 529 plan offers a variety of benefits that can make saving for college more affordable. If you are a Missouri resident, you should consider opening a MOST 529 account today.