Tax Advantaged Options
Also known as a qualified tuition plan, the college 529 savings plan is sponsored by states, state agencies or educational institutions and is not subject to federal tax (and in some cases, state tax). With this method of saving, investors contribute a predefined amount to the plan. The plan then invests these contributions in a variety of securities products, including stocks, mutual funds, bond mutual funds, money market funds and even portfolios that vary by risk threshold as the student approaches high school graduation. Other conditions apply.*
*Investors should consider the investment objectives, risks, and charges and expenses associated with 529 plans before investing. More information regarding 529 plans is available in the issuer’s official statement. Please read the official statement carefully before investing. Investors should also consider, before investing, whether their home state or the home state of the beneficiary offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Other states may include financial aid, scholarship funds, and protection from creditors.
This option is a trust or custodial account that is set up solely for paying a beneficiary’s tuition and expenses – also referred to as qualified education expenses. A CESA must be established on behalf of a student before they turn 18 and guardians can contribute to the account via cash deposits. Once set, the CESA beneficiary is eligible to receive tax-free distributions to pay for qualified education expenses. Other conditions apply.