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529 College Savings Plans
With the cost of a college education continuing to escalate, many investors are taking advantage
of a flexible college savings strategy that allows them to invest more money on a tax-deferred
basis than ever before.
Named after the section of federal tax code that
governs them, 529 College Savings Plans are
a simple, tax-efficient means for meeting the
expenses associated with an advanced degree.
Anyone can open an account at any time for the
benefit of anyone they wish--a child, grandchild,
relative, friend--even themselves! Control of the
assets remains with the contributor so the
accumulated funds are sure to be used as the sponsor wishes. And, if the beneficiary
chooses to forego college, the account owner may change beneficiaries or withdraw the assets.
Although the rules vary from state to state, contribution minimums are generally low, while the
maximum amount allowed over the life of the account is quite sizable--more than $150,000 per
student under most plans. Earnings are treated as tax-deferred until withdrawn. This way, taxes
will not erode your account, allowing more of your savings to work for you over time. What's more,
when assets are withdrawn for qualified higher education expenses, the earnings are federal
income tax-free*!
The plans operate like a mutual fund in that returns fluctuate based on the performance of their
underlying investments. Most plans offer a range of portfolios that include equity and fixed
income investments.
Funds accumulated within a 529 plan can be used for tuition, fees, room and board, books,
supplies and equipment necessary for enrollment and other qualified expenses at nearly every
accredited U.S. institution of higher learning.
529 plans offer significant benefits for investors seeking to fund a college
education:
Convenience and Flexibility
A 529 College Savings Plan account can be opened and funded at any time. The account can be
started with an initial lump-sum contribution (modest or significant) and contributors can make
regular or occasional contributions as they please. Anyone (parents, grandparents, friends, even
the intended beneficiary) can establish a 529 account and anyone can contribute to the account
once it is opened.
Tax-deferred Treatment of Earnings and Tax-free Distributions*
Investment Choices
Choose from a selection of professionally managed portfolios offered by a variety of prominent
mutual fund companies.
Control of Assets
The account owner retains control of the assets and determines how the investment is used.
The beneficiary can be changed* or assets can be withdrawn*.
No income limits or restrictions
Anyone, at any income level can establish or contribute to a 529 account.
Low minimum investments
High contributions limits
Special gift and estate tax treatment*
Account owners can give up to five years of contributions (gifts of up to $55,000, $110,000 for
married couples) in a single year to each beneficiary without gift tax consequences. Also,
contributions are generally excluded from your taxable estate for federal estate tax purposes,
provided you are not the beneficiary on the account.*
Start Now.
It's never too early--or too late to start a college savings program. I can help you set up a 529 plan
and guide you in developing a comprehensive investment strategy designed to achieve your
financial goals.
*The new beneficiary must be a member of the original beneficiary's family. The beneficiary cannot be changed
to the donor. There may be federal gift or generation skipping transfer tax consequences if the new beneficiary
is a member of a lower generation than the original beneficiary.
*Federal income tax on the earnings and a 10% penalty may apply.
*Distributions for qualified education expenses made after December 31, 2001 are federal income tax free. As
with all tax-related decisions, consult with your tax advisor.
NEXT Financial Group, Inc. does not render tax or legal advice. Consult your tax advisor or attorney for tax and
legal advice specific to your situation.
*Subject to an "add-back rule" in the event of your death within 5 years.
With the cost of a college education continuing to escalate, many investors are taking advantage
of a flexible college savings strategy that allows them to invest more money on a tax-deferred
basis than ever before.
Named after the section of federal tax code that
governs them, 529 College Savings Plans are
a simple, tax-efficient means for meeting the
expenses associated with an advanced degree.
Anyone can open an account at any time for the
benefit of anyone they wish--a child, grandchild,
relative, friend--even themselves! Control of the
assets remains with the contributor so the
accumulated funds are sure to be used as the sponsor wishes. And, if the beneficiary
chooses to forego college, the account owner may change beneficiaries or withdraw the assets.
Although the rules vary from state to state, contribution minimums are generally low, while the
maximum amount allowed over the life of the account is quite sizable--more than $150,000 per
student under most plans. Earnings are treated as tax-deferred until withdrawn. This way, taxes
will not erode your account, allowing more of your savings to work for you over time. What's more,
when assets are withdrawn for qualified higher education expenses, the earnings are federal
income tax-free*!
The plans operate like a mutual fund in that returns fluctuate based on the performance of their
underlying investments. Most plans offer a range of portfolios that include equity and fixed
income investments.
Funds accumulated within a 529 plan can be used for tuition, fees, room and board, books,
supplies and equipment necessary for enrollment and other qualified expenses at nearly every
accredited U.S. institution of higher learning.
529 plans offer significant benefits for investors seeking to fund a college
education:
Convenience and Flexibility
A 529 College Savings Plan account can be opened and funded at any time. The account can be
started with an initial lump-sum contribution (modest or significant) and contributors can make
regular or occasional contributions as they please. Anyone (parents, grandparents, friends, even
the intended beneficiary) can establish a 529 account and anyone can contribute to the account
once it is opened.
Tax-deferred Treatment of Earnings and Tax-free Distributions*
Investment Choices
Choose from a selection of professionally managed portfolios offered by a variety of prominent
mutual fund companies.
Control of Assets
The account owner retains control of the assets and determines how the investment is used.
The beneficiary can be changed* or assets can be withdrawn*.
No income limits or restrictions
Anyone, at any income level can establish or contribute to a 529 account.
Low minimum investments
High contributions limits
Special gift and estate tax treatment*
Account owners can give up to five years of contributions (gifts of up to $55,000, $110,000 for
married couples) in a single year to each beneficiary without gift tax consequences. Also,
contributions are generally excluded from your taxable estate for federal estate tax purposes,
provided you are not the beneficiary on the account.*
Start Now.
It's never too early--or too late to start a college savings program. I can help you set up a 529 plan
and guide you in developing a comprehensive investment strategy designed to achieve your
financial goals.
*The new beneficiary must be a member of the original beneficiary's family. The beneficiary cannot be changed
to the donor. There may be federal gift or generation skipping transfer tax consequences if the new beneficiary
is a member of a lower generation than the original beneficiary.
*Federal income tax on the earnings and a 10% penalty may apply.
*Distributions for qualified education expenses made after December 31, 2001 are federal income tax free. As
with all tax-related decisions, consult with your tax advisor.
NEXT Financial Group, Inc. does not render tax or legal advice. Consult your tax advisor or attorney for tax and
legal advice specific to your situation.
*Subject to an "add-back rule" in the event of your death within 5 years.
Securities offered through NEXT Financial Group, Inc. member FINRA and SIPC 2500 Wilcrest, Suite 620,
Houston TX 77042 (877) 876-6398, www.nextfinancial.com
Before investing in a mutual fund or variable annuity, consider its investment objectives, risks, charges and
expenses carefully.
_______________________________________________________________________________
Copyright 2008 McMillion Financial Group LLC. All rights reserved. Revised May 5, 2008.
______________________________________________________________________________
Houston TX 77042 (877) 876-6398, www.nextfinancial.com
Before investing in a mutual fund or variable annuity, consider its investment objectives, risks, charges and
expenses carefully.
_______________________________________________________________________________
Copyright 2008 McMillion Financial Group LLC. All rights reserved. Revised May 5, 2008.
______________________________________________________________________________
Branch Office: 3022 S National Avenue, Suite 326, Springfield MO 65804
Phone (417) 889-9003 E-mail: kmcmillion@mcmillionfinancialgroup.com
McMillion Financial Group LLC is not an affiliate of Next Financial Group LLC.
Phone (417) 889-9003 E-mail: kmcmillion@mcmillionfinancialgroup.com
McMillion Financial Group LLC is not an affiliate of Next Financial Group LLC.
