Missouri - Saving For College Report

We discuss the tax benefits, trends, do's and don'ts and various plan options of setting up a 529 college savings plan in Missouri

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As parents, grandparents and students we know college is coming and that we're somehow going to have to pay for it someday. Fortunately we have many options available to us including savings bonds, the stock market and 529 plans. Starting a 529 account now is always the best option, no matter how old you (or your child) is. While playing the stock market may yield higher returns on your investment, placing your money into a 529 plan allows it to grow in a tax free environment. One study even found that when the federal tax benefits were taken into consideration, 529 plans outperformed their benchmarks in every category.

Missouri has it's own state-operated 529 plan called MOST 529 College Savings Plan. It is important to note that your child does not have to go to a MO college or university in order to use this savings account. 529 plan funds can be used at any accredited college or university across the nation, including some K-12 private schools!

Missouri College Costs & Trends

Colleges and universities across the United States experienced increased operating costs of 2.5% in 2019. This most recent inflation figure was down slightly from the 2.9 percent increase in 2018 and 3.4 percent increase in 2017. These costs are forwarded directly to students in the form of higher tuition and living expenses. As these costs steadily rise every year, parents are looking for ways to help offset these future higher education costs.

These rising costs are hitting closer to home in Missouri as well. Missouri's' higher education costs rose by 5.7% in just the last 10 years, ranking as the 49th highest state.

The table below shows the average one-year costs in 2020 for different types of MO colleges and universities.

OwnershipDegreeSchoolsPublic Out-of-State TuitionPublic In-State TuitionMedian DebtTotal Annual In-State Cost
Public 4 year 13 $16,605 $7,736 $22,909 $12,644
Public 2 year 37 $6,878 $4,294 $9,731 $9,225
Private 4 year 66 $22,389 $22,389 $21,157 $20,210
Private 2 year 54 $10,987 $10,987 $9,907 $15,526

These costs rise every year. Rising tuition is a major driver in these increased higher education costs. Tuition at a 4-year university in MO rose 7% (ranked 48th worst in the US), while a 2-year or trade school increased their tuition by 23 percent.

529 Tax Benefits for Missouri Residents

Missouri offers tax benefits and deductions when savings are put into your child's 529 savings plan.

For single filers:$8,000/yr
For joint filers:$16,000/yr

Best 529 Plans in Missouri

Missouri’s direct-sold 529 savings plan is managed by Ascensus College Savings and uses mutual funds from Vanguard. Missouri's advisor-sold plan closed in May 2016 and all assets were moved to the direct-sold plan.

State Plan Name:MOST 529 College Savings Plan
Minimum Contribution:$0
Maximum Contribution:up to $325,000 per beneficiary, across accounts
Fees:No enrollment or account fees; 0.15% to 0.23% program management fee

Missouri 529 Plan Statistics

There are 169,960 registered in Missouri with a total value of $3,250,685,195. That is an average of $19,126 per account. Unfortunately 529 plans are not widely used... a 2018 study by Edward Jones found that only 29 percent of Americans were even aware that 529 savings plans exist!

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