As a financial advisor, I have the privilege of helping families plan and save for some of life’s most important moments. Few goals are more personal than saving for a child’s education. Whether it’s college, a trade school, or other career training, families want confidence that they’re making informed decisions for their children’s future.
For years, Missouri has supported this goal through 529 education savings plans. Nearly 39,000 Missourians use these plans to save for education expenses, and the state encourages this by offering them a tax deduction when they contribute. This focuses on what matters most: encouraging families to save without dictating how to do it.
Every family’s financial situation is different, and no single plan works for everyone. Missouri has long recognized this by giving families a deduction of up to $16,000 when they contribute to any qualified 529 plan. This flexibility gives families – often with the guidance of a financial professional – the freedom to choose a plan that aligns with their goals.
That freedom is now at risk. Proposed legislation limits the state income tax deduction to contributions made to one state-sponsored 529 plan. Families using other qualified plans – even if they better suit their needs – would lose a benefit they’ve relied on for years. For many, this means a tax increase or being forced to abandon a trusted savings strategy.
While other plans technically remain available, there will be pressure to reallocate investments, not because it’s the best option, but because the state nudges them in that direction.
Not all 529 plans are the same. Some offer more transparency, broader investment options, or stronger performance. When families have options, plans compete for their trust. When competition is limited, families can be pushed into a plan that doesn’t perform as well, putting their children’s future at risk. More concerning is the state-selected plan is among the worst-ranked for its one, three and five-year performance.
Limiting this choice also means an effective tax increase for Missouri families. As education costs continue to rise, this sends the wrong message. Our state should be encouraging more saving, not less.
We encourage Missouri families to contact Governor Kehoe and their state representatives and speak up for consumer choices, against tax increases, and in favor of policies supporting education savings without forcing families into a single option.
Let’s protect what works and preserve choice when it comes to saving for education.
Financial Advisor and General Partner, Edward Jones, Bolivar, Missouri
