GIFT Arkansas 529 Effort Underway
A statewide campaign is currently underway to draw attention to a college investing plan available to Arkansans. As part of the effort, former Miss Arkansas Beth Anne Rankin is visiting all 75 counties and offering residents the chance to find out more, and possibly win an account.
Rankin is spreading the word about the GIFT Arkansas 529 College Investing Plan, which offers tax incentives for those saving toward a college education for either themselves, or someone else. On Wednesday, April 22, she visited Clay County Treasurer Carolyn Morrisett's office as part of her informative tour.
"The GIFT Plan is a 529 college savings program which is sponsored by the state of Arkansas," she explained. "No state funds are used to run the program, all of the money comes from those who have accounts--but, our office is charged with spreading the word."
Rankin noted GIFT is an acronym for Great Investment For Tomorrow, and explained the assets may be used toward enrollment in any eligible two or four year college, trade or vocational school or graduate school in the U.S.
"Each person can set up their own account and pay toward it as they see fit," Rankin explained. "There is just a $25 minimum for setting up an account, but how much or how little is paid in is up to the owner."
She noted the 529 account was much like better-known retirement accounts, which allow a tax break on money paid-in, and on qualifying funds withdrawn. "The system also offers each person to choose the investment option which is right for them," she added. "They can choose aged-based options or a custom portfolio which could be conservative, moderate or aggressive in its approach. Of course, with any such investment account there is also the chance of losing money."
Currently there are over 22,000 accounts and more than $315 million in total assets under the GIFT Arkansas Direct-Sold Plan and over 7,000 accounts and $265 million under management in the iShares Advisor-Sold Plan.
"Anyone, regardless of income, can enroll and open either a direct-sold or advisor-sold plan," she added. "Currently over 76 percent of the direct-sold plans are owned by Arkansas residents."
Rankin noted the average age of a beneficiary in the program is just over 12 years old, and in 2014 the average age of new beneficiaries was just under seven years old, showing a positive trend toward those saving for college while children are young. She added that the average in-state account size is now around $12,000.
"Contributions to an Arkansas 529 plan are tax-deductible for taxpayers in the state of Arkansas, up to $5,000 for an individual and $10,000 for a couple," she added. "An account can be set up with the owner's choice of beneficiary--it could be a child, grandchild, niece or nephew or friend of the family. Or they could set it up where they are the beneficiary."
In an effort to draw more attention to the program, which has actually been in existence since the mid-1980s, Rankin is informing residents of their chance to win an account. "We have just one other staff member and me, and our total marketing budget for this year was limited," Rankin noted. "But, it was enough for us to give away 75 accounts of $529 each to promote the program."
Rankin, and her assistant, occupy space in the treasurer's office in the capitol building in Little Rock, but are not affiliated with the office. "He (Treasurer of State Dennis Milligan) is a big proponent of affording kids a chance to go to college, so he allows us to use space in his office, but we don't work for him," Rankin explained.
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