A 529 college savings plan is a state-sponsored plan for the educational benefit of a child or adult.
A 529 plan can help you save for college expenses. Each state has their own plan, and you’ll usually get state tax benefits from picking the 529 plan from your home state. But if there’s one more beneficial for you, you can choose a different state’s plan as some states do allow for income tax deductions on contributions into out-of-state plans.
We can help you look at your choices to see what college savings plan might benefit you most. To see a comparison of all state 529 plans, the College Savings Plans Network offers really helpful 529 plan comparison information.
A 529 plan can be a good choice if your main goal is to use the money for college costs for you or your kids, and you want high contribution limits. If you want more flexibility with how you can use the funds, you may want to consider a different college savings plan option.
We’re here to help. A local COUNTRY Financial representative can help you review your options and figure out what makes the most sense for you and your family.
You can make contributions to 529 plans for as many beneficiaries as you want, and there’s not a specific age when the beneficiary has to start using the money.
Almost anyone can contribute to a 529 plan – parents, grandparents, friends, corporations and tax-exempt organizations.
The maximum total contribution varies by plan, but the limits are usually over $200,000 per beneficiary.
The money in a 529 plan can be used at accredited public or private colleges in any state.
Investment choices vary depending on the plan. We’ll help you look through your choices so you can decide what’s best for your timeline and goals.
The beneficiary doesn’t have control of or access to their 529 plan – only the plan owner does.
You can make any amount of income and still contribute to a 529 plan.
All contributions are made after federal taxes, but contributions qualify for the $17,000 annual federal gift tax exclusion ($34,000 for joint filers).
Earnings in a 529 plan grow income-tax deferred. You won’t pay taxes on withdrawals either, as long as they’re used to pay for qualified education expenses (see below). And depending on what state you live in and which 529 plan you choose, contributions may be state tax-deductible.
Qualified expenses include tuition, books, fees, supplies, equipment, and reasonable room and board.
Most states have no age limit for when the money has to be used. So there’s flexibility if a child decides to take some time off before deciding if college is right for them. You can also choose to change the beneficiary to another family member.
Withdrawals of earnings not used for educational purposes may be subject to a 10% penalty. Those withdrawals will be included in the beneficiary’s taxable income.
COUNTRY® Capital Management Company is registered with the Securities and Exchange Commission and the Municipal Securities Rulemaking Board (MSRB). An investor brochure describing protections that may be provided by MSRB rules and how to file a complaint with an appropriate regulatory authority is available at www.msrb.org.
For 529 plans, investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. More information about municipal fund securities is available in the issuer’s official statement. The official statement should be read carefully before investing.
The information contained here is general and should not be considered legal or tax advice. Laws of a particular state and your particular situation may significantly affect the general information presented here. The availability of the tax or other benefits mentioned here may be conditioned on meeting certain requirements. State tax deductions mentioned here may only be available if you invest in a 529 plan offered by the state in which you reside. COUNTRY Financial and our representatives cannot give tax or legal advice. You should consult your attorney or tax advisor regarding your specific legal or tax situation.
529 College Savings Plans offered by each state differ in options and benefits. The plan for you depends on your specific objectives and circumstances. Please consider each plan's investment options, fees and state tax implications.
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