Frequently asked questions about Direct Portfolio:
You don’t need much to get started, only $25 when you enroll and subsequent contributions can be as little as $15.
The total amount you save completely depends on your family’s goals and resources. A common goal is to save enough to cover one-third the total cost of college for your student. The earlier you tackle saving for college the better off you’ll be in the end, and the best time to start is now.
What if my student gets a scholarship, or decides not to go to college? 529 Plans are very flexible and you have several options.
- You can simply hold on to the funds in case the circumstances change.
- You can always change the beneficiary to another family member with no impact to your savings. Even naming yourself, or your spouse as the beneficiary and use it go back to school. Or, a lifetime opportunity such as culinary, art, or music classes; oceanography or special interest studies; here in the United States or abroad.
- In the case where the student receives a scholarship, your Direct Portfolio savings can be used to cover other qualified expenses not covered by that specific scholarship.
- Or you can withdraw the funds and close the account altogether but the earnings will be subject to federal and state income taxes in addition to a 10% federal penalty. They may also be subject to recovery for any previous state income tax deductions you exercised.
Some types of investments can be managed for you, like age-based options where your funds are automatically moved toward more conservative investments as your student ages toward going to college.
But it’s also good to have some basic investing knowledge—it’s not hard to learn, and it will help you save for any goal. We’ll teach you the few important things you need to understand.