Today, Senators Richard Burr (R-NC) and Bob Casey (D-PA) introduced the Boost Saving for College Act, which will enhance 529 college savings accounts to help more American families save for college. This legislation would provide a tax credit to low-income and middle-income families who might not ordinarily save for college, encourage employers to match the college savings of their employees, allow savings that aren’t needed for college to be rolled over into a Roth IRA for retirement, and enable families with a disabled child to rollover a 529 account into an ABLE account.
“College savings accounts are incredibly popular because they are a smart way for families to save for a child’s future,” said Senator Burr. “In the past few years, I have advocated for making college more affordable, including getting legislation signed into law that has saved student loan borrowers $36 billion. The Boost Act is a commonsense bill that will expand ways for families to save and prepare for college so that they don’t have to rely so much on debt to get a college education.”
“Saving for a college education is a substantial challenge for families that Congress should be working to make easier,” saidSenator Casey. “A college education is the surest ticket to the middle class and a family sustaining income. This bill will help more families save and ensure that more young Americans have a fair shot to attend college.”
College savings accounts, also known as “529 accounts,” enable families to better prepare financially for the cost of sending their child to college. These accounts allow families to save tax-free, and they can use these savings to pay for higher education expenses, such as tuition, fees, books, room and board, and computer equipment.
As the cost of higher education continues to rise, 529 accounts have become an increasingly popular and necessary tool for families to save for college so that they do not have to rely so heavily on student loans. Today, the average cost of obtaining a degree from a two-year institution is more than $19,000, and it is nearly $100,000 from a four-year university.
The Boost Saving for College Act would make 529 accounts a more attractive option by adding some significant enhancements, such as:
“A penny saved is a penny earned,” goes an old American adage. But if you’re a person with a disability who receives some form of public benefits, things aren’t as simple as Benjamin Franklin made them out to be.
Instead, limits on assets as low as a few thousand dollars for public benefits programs pose a challenge for people with disabilities because too much money in the bank could affect their eligibility for programs.
“It’s a game they play. They have to spend money because losing access to the benefits is critical,” said Kathleen Kleinmann, executive director of Tri-County Patriots for Independent Living, or TRIPIL, an advocacy group based in Washington.
Kleinmann was among the advocates across the state who welcomed the passage of a state law last week that makes some people with physical and intellectual disabilities eligible for tax-free savings accounts that allow them to put aside money to cover expenses related to their disability – including assistive technology, personal assistance services and health care – without losing their eligibility for public assistance.
Kate Blaker, volunteer coordinator for TRIPIL, said that when they’re available, the new accounts also could be used to cover education and transportation.
“This isn’t about helping people save for luxury vacations,” said Brenda Dare, independent living supervisor for TRIPIL. “It’s about helping people save for their basic needs.”
Millions of Americans do not have the financial resources they need to access higher education, buy a home or retire comfortably. If we want to continue to compete globally, it is time for Congress, state governments, the private sector and communities to renew our effort to raise the level of financial literacy and security in our country.
Many Americans are in a perilous financial situation today, with nearly 75 percent reporting that they live paycheck to paycheck. Only 40 percent of US adults keep a budget and track their spending, while 27 percent of families have no savings at all. Alarmingly, only one-third of parents have a plan to pay for college expenses, even as student loan debt has skyrocketed 235 percent in the past decade. And only 26 percent of people are expected to be able to retire in a traditional way.
Like all state treasurers we are on the front line of these issues, overseeing financial tools such as 529 college savings plans and pensions, and we are deeply troubled by these statistics. This month – Financial Literacy Month – we will continue our efforts to raise awareness of the importance of financial literacy and work with the private sector and our government partners to do the same.
The National Association of State Treasurers (NAST) and the National Association of State Auditors, Comptrollers and Treasurers (NASACT) represent both elected and appointed government officials tasked with the management of state finances, including the investment of state and local government funds. Both organizations share a common goal of promoting safe, effective and efficient management of public funds, including those invested in external investment pools known as local government investment pools (LGIPs).
JEFFERSON CITY, Mo. – State Treasurer Clint Zweifel announced Thursday Missouri’s involvement in a nine-state consortium to establish an “Achieving a Better Life Experience,” or ABLE, program. The ABLE program allows states to make savings programs for the disabled or those with special needs as it relates to their disability.
Zweifel says the state should provide for those with extra needs to put them on an even playing field.
“In creating these ABLE accounts, our priority first and foremost is to serve the needs of Missourians with disabilities in a fiscally sound way that honors their circumstances,” Zweifel said in a statement. “These accounts will give families more financial security and empower them to make long-term planning decisions surrounding their specific needs.”
Alaska, Illinois, Iowa, Kansas, Minnesota, Nevada, Pennsylvania, and Rhode Island are the eight other states pursuing ABLE programs. ABLE has already been enacted at the federal level. It would allow those with disabilities to create tax exempt-savings accounts on the condition the money placed in those accounts is used only to treat their disability.
“I am excited about the Missouri ABLE Program and the benefits that it offers those with disabilities and their families,” Zweifel said.
View the Missouri Treasurer’s ABLE Page here: https://treasurer.mo.gov/content/achieving-a-better-life-experience
The long-running CBS News program 60 MINUTES featured an in-depth segment on Sunday April 17th, which examined the efforts of several unclaimed property officials around the country in their fight to ensure insurance companies are properly reporting and paying out unclaimed life insurance policies. Included in the segment were Florida CFO Jeff Atwater, Oklahoma State Treasurer Ken Miller, and West Virginia State Treasurer John D. Perdue.
The story by CBS News Correspondent Lesley Stahl exposed the tactics and motivation behind efforts in several states by life insurance companies to block unclaimed property programs from discovering and returning policy proceeds to its rightful owners. The treasurers are speaking out strongly in favor of consumer protection.
Treasurer Miller, who was interviewed in the program, said “It is my hope that by shining a national spotlight on the shameful tactics of these out-of-state insurance companies, their plans will be squelched.” Florida CFO, Jeff Atwater, whose state just passed a bill that strengthens consumer protections related to life insurance, hopes his work can increase “…the number of policies that are properly—and timely—paid out.” Treasurer Perdue, who was featured returning an unclaimed life insurance check, is glad to help raise awareness. “I am glad ’60 Minutes’ is taking a more in-depth look at this issue, and shining a light on what’s being done here in West Virginia and around the country to make sure insurance companies report unclaimed funds similarly to any other business,” Perdue said.
Watch the segment here:
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SPRINGFIELD – Illinois families planning for the future well-being of a loved one with a disability will be able to leverage the investment power of a multi-state consortium to invest their money for disability‑related expenses, Illinois Treasurer Michael Frerichs announced today.
The consortium will manage a tax‑advantage investment portfolio similar to those currently used to save for college, such as Illinois’ Bright Start or Bright Directions program. Without the consortium, individual states would lack the market share to ensure low cost and high quality investment options.
“Every parent wants the best for their son or daughter. That feeling weighs a bit heavier on parents of children with a disability or blindness,” Frerichs said. “By working together with other states, we can accomplish what would be impossible if we were to go it alone.”
The federal Achieving a Better Life Experience Act (ABLE) of 2014 authorized these tax-advantaged investment accounts similar to college savings programs such as Illinois’ Bright Start or Bright Directions. College investment programs are able to provide low fees and quality investment options by leveraging investments from the hundreds of thousands of individuals who participate.
The opposite is true with ABLE because individual states typically do not have enough potential participants to solicit a competitively priced and structured program. However, with states working together and leveraging resources, an economy of scale is created to drive down cost and attract quality investment products.
Nine states so far have agreed to work together to help these individuals and families – Alaska, Illinois, Iowa, Kansas, Minnesota, Missouri, Nevada, Pennsylvania and Rhode Island. The states represent more than 47 million residents and cover four time zones. Consortium membership remains open and other states are considering joining. Nationally, more than 40 states have passed ABLE legislation. None have yet to open an ABLE program.
The consortium is unique in that each state will have its own ABLE program over which it will exercise authority but will offer common program elements such as investment options. The next step is to seek public bids for investment services, record keeping, and marketing services.
Jackson, MS. Treasurer Lynn Fitch, Selene Swartzfager, President of the Mississippi Council on Economic Education (MCEE), and staff and members of the MCEE Board of Directors joined Governor Phil Bryant today as he signed the proclamation naming April 2016 Financial Literacy Month.
I want to thank the Governor for recognizing the importance of financial education by signing this proclamation,” said Treasurer Lynn Fitch, who has made financial literacy for all Mississippi students a cornerstone of her agenda as Treasurer. “Mississippi ranks dead last in our financial habits and number one in poverty. And, that is no coincidence. If we want to show we are serious about breaking the cycle of poverty in Mississippi, we need to teach Mississippians the language of money. Really, every day needs to be financial literacy day.”
“MCEE is a statewide organization with limited resources, but big impact across Mississippi,” said Selena Swartzfager, President of MCEE. “By partnering with Treasurer Fitch’s TEAM initiative, as well as schools and businesses, we’re able to spread our limited resources. When we train teachers in personal finance, economics, and entrepreneurship, we give them the tools to teach their students these crucial life skills. And, when our children are prepared for a more prosperous future, all of Mississippi thrives.”
Since taking office in 2012, Treasurer Fitch has been working with the Legislature to make financial education a required part of the high school curriculum. While the House has passed that legislation three times, the Senate has yet to consider it.
In the meantime, the Treasurer has established the Treasurer’s Education About Money (TEAM) initiative, a public-private partnership that has brought financial education resources to over 230 schools across Mississippi. As a TEAM partner, MCEE has helped train more than 555 teachers in personal finance. In its first year, TEAM reached more than 19,000 high school and middle school students.
For more information on TEAM, visit www.treasurerlynnfitch.com. For more information about MCEE, visit www.mscee.org. The text of the Financial Literacy Month proclamation is attached, as well as a photo from the signing and statistics on financial literacy in Mississippi.
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Vermont State Treasurer Beth Pearce, NAST’s incoming president, has partnered with Governor Phil Scott to launch a statewide Financial Literacy..