Education Funding

The cost of education continues to climb, so starting early can make a big difference for your child's future.

How do college savings plans work?

According to the Bureau of Labor Statistics, children could face college costs that are 3 to 4 times higher than current prices. While this stat might make saving for college feel unattainable, there are education funding options available to help make it easier.

Funding options

Here’s a comparison1 of the education funding options COUNTRY Financial can help you with (2020 information):

Things to consider

529 college savings plan

Roth IRA

Uniform gifts / Transfers to minors act

(UGMA/UTMA)

How you can use the funds

Qualified higher education expenses

Contributions can be withdrawn at any time without tax or penalty. Earnings are taxed, but not penalized if used for qualified educational expenses.

Anything benefiting the child

How much you can contribute

Varies by state, but total contributions limits are typically over $200,000 per beneficiary. Contributions qualify for the $15,000 annual federal gift tax exclusion ($30,000 for joint filers).

Up to $6,000 per year per person, plus $1,000 catch-up contribution if age 50 or older. Contributions can be made as long as account owner has income.

Unlimited, and contributions qualify for the $15,000 annual federal gift tax exclusion ($30,000 for joint filers).

Income limits

No limit

No contribution if MAGI exceeds $137,000 ($203,000 for joint filers)

No tax deduction allowed. Taxes may be paid at the child’s rate up to certain limits. Taxes are at the parents’ rate thereafter. Gains may be taxed at capital gains rate.

Taxes

Federal tax-deferred earnings and withdrawals for qualified expenses. Some states allow tax deductions. 

Contributions are made on after-tax basis. No federal income tax on earnings for qualified distributions.

No tax deduction allowed. Taxes may be paid at the child’s rate up to certain limits. Taxes are at the parents’ rate thereafter. Gains may be taxed at capital gains rate.

Account control

Generally, control of the assets remains with the account owner.

The account owner maintains control of the assets.

Generally, assets become the child’s property at age 18 or 21 (depending on state).

College options

No restrictions

No restrictions

No restrictions

Beneficiaries

Can be changed to another family member

Can be changed

Cannot be changed

Ready to start?

Find a local rep or call us at 866-267-6879.  We'll help you find a plan that works for you.

COUNTRY Financial® is the marketing name for the COUNTRY Financial family of affiliated companies (collectively, COUNTRY), which include COUNTRY Life Insurance Company®, COUNTRY Mutual Insurance Company®, and their respective subsidiaries, located in Bloomington, Illinois.

1The information contained herein is general and should not be considered legal or tax advice. Laws of your particular state and your particular situation may significantly affect the general information presented herein. The availability of the tax or other benefits mentioned above 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.

NOT FDIC-INSURED

May lose value

No bank guarantee

Investment management, retirement, trust and planning services provided by COUNTRY Trust Bank®. 

Registered broker/dealer offering securities products: COUNTRY® Capital Management Company, 1705 Towanda Ave, PO Box 2222, Bloomington, IL 61702-2222, 1-866-551-0060. Member FINRA.  Read our full Customer Relationship Summary and Investor Handbook.

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.

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 plans investment options, fess, and state tax implications. You should consult your attorney or tax advisor regarding your specific legal or tax situation.

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