As the price of a college degree rises and student-loan debt balloons, employers are adding education-related perks to their benefits packages. One that is gaining traction: payroll deduction to contribute to a 529 college-savings plan. Nationwide, 11% of employers surveyed offered the benefit in 2018, nearly double the percentage in 2014, according to the Society for Human Resource Management (opens in new tab) (SHRM).
In California, payroll deduction for the state’s ScholarShare plan (opens in new tab) is available through nearly 1,000 employers—and the number of employers signing up to offer ScholarShare doubled in 2018 compared with 2017. A small number of companies also provide matching contributions to a 529, similar to those commonly offered for 401(k) plans.
By having your employer carve out a contribution from your paycheck, you can dedicate money to college savings before you have a chance to spend it. And employers may provide extra help. With the California plan, for example, ScholarShare staff visit participating companies to educate employees and assist in opening accounts, says Julio Martinez, executive director of the ScholarShare Investment Board.
Lisa has spent more than15 years with Kiplinger’s Personal Finance and heads up the magazine’s annual rankings of the best banks, best rewards credit cards, and financial-services firms with the best customer service. She reports on a variety of other topics, too, from retirement to health care to money concerns for millennials. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.
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