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8 Steps to Opening a Virginia 529 Account

For clients in Virginia with school-age kids (or younger), we strongly recommend the Virginia 529 inVEST account as a means of saving for college.  The inVEST plan has the following benefits:

  • Tax-free growth on your investments (provided withdrawals are used for qualified education expenses)

  • Current deductions on your state income tax (up to $4,000 per account, so if you and your spouse both open an account for your child, that’s potentially $8,000 in deductions per child)

  • Flexibility to use your inVEST funds at any college (in-state or out)

  • Relatively low-cost investment choices (expense ratios of the age-based evolving portfolios range from 0.25% to 0.74%, which includes the Virginia529 administrative fee)

  • Ease of savings with a low initial minimum contribution ($25) and automatic investment plans to facilitate monthly contributions from your bank account

To open a VA 529, simply follow these 8 steps: 

  1. Create an online user profile on the Virginia 529 website

  2. Select “New Virginia529 inVEST Account” under the “Open an Account” drop down box

  3. Provide information on the Account Owner, Account Owner Relationship, Beneficiary, Designated Survivor, and Other Authorized Individual

  4. Use the Timeline of the Age-Based Evolving Portfolios (currently found on page 27 of the inVEST Program Description) to select an appropriate portfolio given your child’s age

  5. On the Product Selection page, input your initial investment amount and recurring bank debit (for automatic monthly savings) into the boxes for the selected portfolio

  6. Submit and review your application information, read the inVEST Account Agreement

  7. Give us a quick call or check online for a promotional code to avoid the $25 application fee as you finalize the application process

  8. Give yourself a pat on the back for taking an important step toward providing for your child’s college education, and don’t forget at tax time to include your 529 contributions for the year on your state tax return to cash in on your VA state income tax deduction!

For clients living outside Virginia, we recommend investigating your own state’s laws for 529 deductions or credits (or ask us for help!).  Most states do offer some level of credit for contributions to the state’s 529 plan, and a few (Arizona, Kansas, Maine, and Pennsylvania) offer deductions to any state’s 529 plan, allowing you to shop around for which plan is best for you.  If you live in a state without income tax, you might consider investing in a 529 plan through a mutual fund company such as Vanguard.  The initial contribution requirement is higher ($3,000), but the fees are very low (expense ratio is only 0.21%).

Most importantly, if providing for a child’s college expenses is one of your financial goals, and you have not yet started saving, start today!  Mike has remarked based on his own recent observations that, strangely enough, colleges really do want to get paid and really will send you a bill twice a year!  Set up a 529 plan, establish an automatic investment plan with a monthly contribution that is achievable for you, and with each passing month, the once-overwhelming goal of saving for college will grow slightly more within reach. 

     
 

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