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E-mailUse the money at any school in any state. Money accumulated in most plans can be used for room, board, books and supplies at any accredited two-year or four-year college or university, or post-secondary vocational training program in the United States.
Invest without income restrictions. Anyone (parent, grandparent or others) can establish a Section 529 account, regardless of income level or beneficiary's age. This may be ideal for high-net-worth investors who want to reduce their estate taxes while contributing to a child's education.
Realize enhanced gift tax benefits. You can contribute to a Section 529 plan up to $60,000 ($120,000 for married couples filing jointly) for each child (beneficiary) in a year without federal gift tax consequences. No other gifts are allowed to that child for a five-year period.
Withdraw earnings tax-free. Investment earnings, when withdrawn for qualifying education expenses, are federal tax free. Any earnings proceeds that are not used for education or given to another beneficiary for education will be subject to income taxes.
Change beneficiaries. You can change the beneficiary at will to an eligible family member of the original beneficiary. So if one child does not use all the money for education, you can designate it for another.
529 College Savings Plan
Product Overview
A state-sponsored Section 529 plan is a flexible program created specifically to help people accumulate money to pay higher-education costs. It offers incentives such as tax-free distributions when used for qualifying higher-education expenses.
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Guidelines
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Section 529 plans are municipal securities that may lose value and are not government or FDIC insured. The value of an investment in a Section 529 plan will fluctuate and when withdrawn, may be worth more or less than its original cost. There is no guarantee that the plan will grow to cover college expenses. 529 Plans are subject to enrollment, maintenance, administration/management fees and expenses.
Before investing in any 529 plan, you should consider whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with favorable
state tax and other benefits that are only available through investment in the home state's 529 plan. You also should consult your financial, tax, or other adviser
to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. Keep in mind that state-based benefits should be
one of many appropriately weighted factors to be considered when making an investment decision. Plans are subject enrollment, maintenance, administration/management
fees and expenses.
Before investing in any 529 plan, you should consider whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with favorable
state tax and other benefits that are only available through investment in the home state's 529 plan. You also should consult your financial, tax, or other adviser
to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. Keep in mind that state-based benefits should be
one of many appropriately weighted factors to be considered when making an investment decision. Plans are subject enrollment, maintenance, administration/management
fees and expenses.