Collegebacker is a simple and easy way to start saving for college through a 529 plan.
If you’re looking for ways to save money for your kids’ college education and want the support of family and friends, then you’ll want to keep on reading.
Collegebacker enables you to create a 529 college savings plan and share a unique link with family and friends where they too can contribute. It can be an alternative to gifting toys and gift cards for all those birthdays and graduations.
Ready to start saving for college? Get started right now with Collegebacker.
529 Savings Plans
The IRS defines “a 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.”
It’s a financially smart way of saving money for college. Because of the tax advantages, there are limits and rules you must follow.
529 plan funds can be used to pay for education-related expenses from elementary to graduate level. The funds can only be used on things like tuition, books, and boarding.
If your child doesn’t go to college, you can change the beneficiary to another who can use the funds. Otherwise, if you withdraw the money for other reasons, you’ll incur a 10% penalty plus taxes at your current income rate.
Understand that 529 plans are owned by the parents, not the child. This is different when compared to UTMA/UGMA accounts.
Why Use 529 Savings Plans?
Here are a few reasons to consider:
Tax-free investing – contributions to a 529 plan grow tax-free and be withdrawn tax-free to pay for educational expenses.
Flexible and versatile – 529s can be used for higher education, K-12, apprenticeships, and student loans. It can also be transferred within the family.
Better for financial aid – unlike UTMA/UGMA, a 529 plan will have minimal impact on our child’s financial aid eligibility.
What is Collegebacker?
Collegebacker has a mission to make college affordable for every American family. As an SEC-registered investment advisor, its platform suggests the best 529 plans with low-fee investment options for a child of any age.
How Collegebacker Works
Collegebacker is a robo-advisor that helps you with 529 plans. They do not hold your funds and use a broker to do so. Instead, they act as the intermediary that simplifies the process and provides advice.
With Collegebacker, it’s easy to start and manage your 529 plans with an intuitive and sleek online platform. No more clunky websites which are often associated with 529 plans.
What sets them apart from others is the ability to make saving for college a family and friendly affair. You can create a unique page for your child and share it with others so they can contribute to your child’s college fund.
You have options to choose from:
- Backer Safe – an FDIC insured plan that works more like a high yield savings account than an investment account.
- 529 Plan – set up a plan and choose the best state program for you
Features & Benefits
- Easy 529 plan setup – get help with setting a plan for your child in under 5 minutes.
- Robo-advice – maximize your college savings with tax-free investing and low-cost funds.
- Social – get family and friends involved with gifts and cashback rewards using a customizable gifting page.
- Completely online – easy tools to open, maintain, and monitor plans
- Cashback rewards – boost your savings with cashback from everyday purchases with rewards directly deposited into your child’s college fund.
- Connect existing plans – have your existing plans accessed through the platform.
Fees & Pricing
Collegebacker believes in universal access to college savings. The first month is free, and then you decide and pay what’s fair.
- Monthly fee: $1 per month for all children (most families choose to pay $5/month)
Note: 1% of the fees collected are used to support low-income families college education goals.
If you envision your child going to college, then Collegebacker is the platform to help you. Instead of trying to understand the jargon and work through all the different state programs, they provide advice on the lowest-cost funds.
And even better, you can get your family and friends involved. Instead of filling up your house with material gifts that are used and discarded, your loved ones can contribute to your child’s future. This is done with a sleek personalized website. Have a birthday party coming up? You can let your invitees know they can contribute to the fund instead of buying a gift.
If you’re unhappy with the service for any reason, simply send an email to request how to discontinue using the service and maintaining your 529 plan.
Who is it best for?
It’s best for any parent or guardian who wants to effortlessly save for a child’s college education. Collegebacker’s platform makes it easy to manage your existing 529 plans and get others involved in your kid’s future.
There are no age restrictions or income requirements, anyone can open a 529 college savings plan.
How to start using Collegebacker
Time needed: 5 minutes.
Step-by-Step to opening an account with Collegebacker
- Getting started
Use this link to get started.
- Enter your personal information
Answer a few questions to get robo-advice.
- Start your 529 plan
Begin investing for your child’s future.