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About Backer
Backer is an American company that allows parents, friends, and family members to contribute to their child’s 529 account. What’s that, I hear you asking. Well, it’s arguably the best account you can open for your child’s education, according to experts.
According to the numbers, Backer is quite good at what they do. They’ve saved US families more than $500 million in student debt, so it’s not surprising they’ve received attention from The New York Times, Fast Company, Fox Business, and more.
You can think of Backer as being the Kickstarter of funding your child’s education. It’s a platform that allows you to build and share a 529 account for college tuition. You can share the link with family and friends so that they can add to the fund, lessening the burden on your shoulders.
Jordan Lee created Backer in 2016 as a way to bring families together to save for the next generation. He realized the 529s were the best accounts for education as the money inside them grows tax-free.
In my Backer review, I will look at more than just the numbers though. Here, I’ll cover how a 529 works, what are the benefits that come with using Backer, and what customers have to say about the service.
Backer 529 Review
The first component I’ll break down is the brand’s 529 offerings. A 529 is a qualified tuition program. They provide you with lower taxes on your savings, higher contribution limits, and lower deposit minimums. In short, they’re a smarter way to build toward your child’s college career.
The simplicity with which Backer operates is one of the reasons why you’d want to open an account with them. You can set up an account in about 5 minutes. Don’t worry, I’ll tell you how to do that later in my Backer review.
Backer predicts that your savings will grow by about 8% per year, meaning that the more you contribute, the more you’ll save. They can also work with you to develop the proper savings plan that coincides with your goals and how much money you can put away.
One major advantage of the Backer 529 is that contributions aren’t taxed as they grow. Additionally, you can withdraw them to pay for post-grad expenses that your child has qualified for without any federal taxes.
However, I should note that Backer themselves do not hold or operate your 529. They automatically reduce financial risks, guide you towards lower-cost funds, and help you open your own 529. If you already have a 529 account then you can connect it to Backer.
Backer Features Review
While the majority of my Backer review will cover the features that come once you open an account with the company, one of their most useful features is free to use.
Their savings calculator is accessible for anyone who pops onto their website and can give you an idea of how much you’ll save for your child’s education based on:
- Your monthly savings goal.
- How much your friends and family contribute per year.
- How old your child is.
Backer Contributions
There are no two ways around it: college is expensive. If it wasn’t, then you wouldn’t be reading this Backer review in the first place. To help offset the huge financial burden your child’s tuition can place on you, Backer encourages you to invite others to help you save money for your child.
Friends, family, in-laws, and even coworkers can all help build your kid’s future. You can even make separate accounts within your main Backer account so that all contributors can see how much they have given.
The minimum contribution on Backer is $5, which is about the same as most people pay for their morning coffee on the way to work. Think about it, if you cut out coffee for 40 days, you could give your niece a great boost toward their tuition while observing Lent.
Backer Cashback Rewards
Backer offers users the opportunity to earn 1-10% of their purchase in rewards. These rewards are deposited right into your 529. You can redeem these cashback rewards at:
- Office Depot
- Ace Hardware
- Peet’s Coffee
- Vivino
How Does Backer Work?
Now is the part of the section of my Backer review that will cover the application process. You’ll begin by entering your email and creating a password for your account.
Then you supply them with basic information about you so that you can personalize your Backer account. After that, your account is all set up. All that remains is to add funds, verify your identity, and make the first contribution so that Backer can certify your 529.
Who Is Backer For?
The services I covered in my Backer review would be most useful to new parents who have time to save for their child, or are looking for an easier way to get the most out of their investment.
Backer Reviews: What Do Customers Think?
There weren’t many Backer reviews on the internet, but I was able to pull from some comments I read on Trustpilot, Instagram, and TikTok, of all places. Overall, customers were happy with the brand’s service and functionality. That’s evident in the brand’s average score of 4/5 stars on Trustpilot, which came from 4 pieces of customer feedback.
The collaborative nature of Backer was what many people admired most about the platform. Here’s what one user on TikTok said about the ability to combine funds:
“We really needed to start saving for our baby. I love that family members can make contributions. Instead of giving the baby gifts or monetary gifts they can just make a contribution towards their college fund. It makes me feel comfortable knowing we are saving for his future.”
People liked that their money was going towards a good cause and was actually going to make an impact on the child’s future. This was due to the fact that Backer contributions weren’t taxed so buyers could contribute as much as they wanted without worrying about the money vanishing due to taxes. As one user wrote:
“I love using Backer to help my sister save for her daughter’s college education. Instead of gifting my niece another toy that she’s ultimately going to get bored of at some point, I prefer helping to save for her future. My sister shared a link for her gifting page and it was very easy to set up an automatic contribution to her fund.”
They concluded: “I will definitely open my own Backer account when I have a kid someday. Highly recommend!”
I’ve included one final Backer review from a customer that echoes the sentiment that other happy customers laid out:
“I’ve been wondering for a while how to efficiently save money for the future education of my kids and finally found a great solution with the Backer application. It makes it really easy for family and friends to contribute to my kids’ Backer funds. It also allowed me to open 529 accounts for my 2 kids in minutes. Highly recommended for new parents!”
Overall, it seems like parents and loved ones alike appreciated the flexibility and simplicity of Backer. Customers agree that the company makes it easy to take advantage of some great ways to save and invest in your child’s future.
Is Backer Legit?
I couldn’t find any dirt or sketchy mishaps that made me believe Backer weren’t legit.
Is Backer Safe?
Since your money is stored in a bank and not by Backer, it’s safe in the event that Backer goes under. On top of that, you can transfer everything out of Backer to another account if you want. The company can help you accomplish this.
How Much Does Backer Cost?
There are two different options you can choose with Backer. There are the Backer One Child plans, which expectedly only cover one kid per household and/or family, and they cost just under $3 per month.
The other available plan is the Backer Multiple Children funds, which cost just shy of $6 per month and can cover up to 5 kids.
Beyond that, there’s the tax-advantaged Backer 529 plan, which is exactly what it sounds like. Backer will find you a 529 account that offers even more tax advantages than a regular 529. These accounts have an expense ratio of 0.15% annually.
Is Backer Worth It?
Due to the low fees and tax-free growth, I think that Backer is worth it.
Backer Promotions & Discounts
Their main promotion, which I mentioned earlier in my Backer review, is their cashback rewards program. It won’t put a ton of money into your child’s account, but it’s better than nothing.
How To Sign Up on Backer?
You can sign up on the brand’s website, www.backer.com.
FAQ
Who owns Backer?
Jordan Lee is the brand’s founder and CEO.
Can I create a fund if I’m not the parent of the beneficiary?
You cannot create a new fund but you can join one after you receive the invitation code.
Why do I need a 529 college savings plan?
You don’t need one, but they’re the best way for you to save money for your child’s tuition as their deposits aren’t taxed.
What is Backer’s Privacy Policy?
Backer uses encryption-based browser security to protect your information.
What is Backer Cancellation Policy?
You’ll have to contact Backer to cancel your plan using the information below. If you do, they can help you move all your funds over to a new account.
How to Contact Backer
You can contact Backer by filling out a customer service form on their website or by sending them an email at [email protected].
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