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College Planning

They grow up fast, sometimes faster than you can save. Talk to one of our Investment Consultants today about setting up a college plan that is right for you. We offer both 529 Plans and Coverdell Education Savings Accounts. Both plans have significant tax advantages, including earnings free from federal tax. You also have control of where the funds are invested, from a single fund approach to a diversified fund approach. These funds can be used for tuition, books, and/or room and board. Paying for college is harder than ever. Help your child or grandchild reach their dreams by planning now.

Frequently Asked Questions:

• What is a 529 college savings plan?
• What is a Coverdell Education Savings Account?
• Is there Investment flexibility with both?
• Can I change the beneficiary?
• What are the penalties on nonqualified withdrawals?

 

What is a 529 college savings plan?

• Earnings in the account can grow free from federal tax
• Withdrawals for qualified higher education expenses are free from federal tax
• There are no income limits. You can contribute no matter how much you earn
• You can contribute up to $12,000 ($24,000 for married couples) each year without gift-tax consequences
• You maintain control of the assets
• You can open a 529 plan for anyone—your child, grandchild, spouse, or even yourself
• You can use a 529 plan to pay higher education expenses at any eligible educational institution, not just schools in the state that sponsors your plan                                      
  

What is a Coverdell Education Savings Account?

• Used to pay for qualified education expenses from kindergarten through high school and higher education
• Earnings grow tax deferred
• You can invest up to $2,000 per year
• You can change investment options as often as you wish
  

Is there Investment flexibility with both?

You maintain control of the assets, decide when withdrawals will be made, and can roll over funds once every 12 months.

Can I change the beneficiary?

Yes, both plans allow you to change the beneficiary at any time.

What are the penalties on nonqualified withdrawals?

Nonqualified withdrawals are penalized with ordinary income taxes and a 10% federal tax penalty on earnings.

 

Investors should consider the investment objectives, risks, charges, and expenses associated with a 529 Plan carefully before investing. The issuer’s official statement contains this and other information about the investment. You can obtain an official statement from your financial representative. Read carefully before investing.