Nearly $40,000 in “Free Money” Paid to DE529 Education Savings Plan Accounts
Delaware’s “First State, First Steps” program has been extended until at least the end of June of this year. This is a pilot incentive program for Delawareans offering a $100 contribution to a new DE-5-2-9 Education Savings Plan account. In the past 6 months $37,700 has been added to those accounts, which gives 377 young Delawareans a head start on saving for college. For each newly opened DE 5-2-9 account – First State, First Steps will contribute $100 into each.
Additional information from the Delaware State Treasurer:
“I am thrilled that our First State, First Steps program gave 377 young Delawareans a head start on saving for college,” State Treasurer Colleen Davis said. “Because of the project’s success, the Plans Management Board approved its extension until at least June 30, 2023.”
First State, First Steps will contribute $100 into every newly opened DE529 account if:
- The beneficiary is five years of age or younger at the time of account opening
- The beneficiary is a Delaware resident at the time the account is opened
- A minimum contribution of at least $100 is made to the DE529 account when the account is opened
Managed by Fidelity Investments, the DE529 Education Savings Plan provides tax-advantaged accounts designed to help parents, grandparents and others pay for higher education expenses. Withdrawals for qualified higher education expenses like tuition, fees, and books are federal and Delaware income tax-free.
Money in a DE529 account not spent on education costs can now continue to help with future saving thanks to the recent passage of the Secure 2.0 Act in the omnibus spending bill supported by Treasurer Davis, approved by congress and signed by President Biden at the end of December.
“The need to save for future expenses goes beyond the college years and beginning in 2024, money left in a DE529 account can be rolled into a Roth IRA belonging to the beneficiary of the 529 account,” Treasurer Davis said. “Up to $35,000 in total can be moved without penalty though funds cannot exceed Roth IRA annual contribution limits, and the DE529 account that holds the money will need to have been open for at least 15 years.
For more information on the DE529 Education Savings Plan and the First State, First Steps program, visit 529.delaware.gov.
