Facts About New Mexico's 529 Plan

To help facilitate early college savings, a tax-free 529 plan can be a good option. Each state across the U.S. has its own specific plan that is tailored to residents.

As college tuition costs far exceed the rate of inflation, parents and guardians across the U.S. are looking at new ways of funding their child’s college education. Many experts say the best way to accomplish this goal is to start saving early.

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Below are eight facts about New Mexico’s 529 program, known as The Education Plan:

1. According to the official website of The Education Plan, New Mexico officials have tailored the program in such a way that it is designed to meet residents’ financial portfolios, regardless of income level.

2. As a 529 program, The Education Plan gives New Mexico participants considerable leeway in contributions throughout the life of the account. The range goes from as little as $25, to as high as $294,000 per beneficiary.

3. Participants can open their Education Plan account in about 15 minutes. The application process can either be completed online or by printing off an application, filling it out by hand and mailing the form in.

4. New Mexico residents can add funds into their 529 plan at any time by depositing the money through an online portal.

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5. According to Savingforcollege.com, several companies have financed The Education Plan. The investment companies partnering with the state of New Mexico to offer a 529 plan include Oppenheimer Funds, Dreyfus Investments, and The Vanguard Group.

6. New Mexico’s 529 plan includes a low-fee option that gives participants the opportunity to earn even more. Costs vary from 0.29 percent to 0.71 percent per portfolio. A financial advisor can assist in making decisions on the low-fee feature.

7. The Education Plan offers a number of tax advantages to New Mexico residents, including a provision that allows taxpayers to deduct the contributed amount from an annual year’s worth of income.

8. New Mexico residents participating in this 529 plan can do so through an automated system. Contributed funds, in any dollar amount, are added and subtracted electronically from the participant’s account.

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