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Education Funding

The cost of education can be daunting. Smart planning can help.

It’s no secret that getting an education is expensive. But it can really pay off. According to the Bureau of Labor Statistics, someone with a bachelor’s degree earns almost $24,000 a year more  on average than a high school graduate.1 There may be other benefits to a college degree too, including: more career opportunities, greater chances for advancement and improved employee benefits.

 

Select a product below to learn more

529 Plan

Take a bite out of future college costs. A 529 College Savings Plan can be a great way to save.

Coverdell

Whether you’re planning for elementary school expenses or college costs, a Coverdell can help.

Other Funding Options

If you’re unsure your child will attend college or simply want more choices, we have options.

The Costs

Many people feel intimidated by the cost of a college education, and for good reason. 

The average annual costs of tuition, room and board for the 2013-2014 school year for public and private college were2:

4-year in-state public university 4-year private university 2-year public college
Average annual cost

$18,391

$40,917

$3,264 (Tuition and fees only)

Increase over prior year

3.2%

3.2%

3.5%

Paying for College

The costs are high, but there are great education funding options available to help make it a lot easier to plan for education expenses.

Here’s a comparison of the educaton funding options COUNTRY Financial can help you with (2014 information)3:

 

Coverdell Education Savings Account 529 College Savings Plan Roth IRA Uniform Gifts / Transfers to Minors Act (UGMA/UTMA)
How you can use the funds

Qualified elementary, secondary, and/or higher education expenses. Assets must be used by age 30 to avoid taxes and penalties

Qualified higher education expenses

Contributions can be withdrawn at any time without tax or penalty. Earnings are taxed, but not penalized.

Anything benefiting the child

How much you can contribute

Up to $2,000 per year per child under the age of 18. Contributions exempt from gift taxes.

Varies by state, but total contributions limits are typically over $200,000 per beneficiary. Contributions qualify for the $14,000 annual federal gift tax exclusion ($28,000 for joint filers).

Up to $5,500 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 $14,000 annual federal gift tax exclusion ($28,000 for joint filers).

Income limits

No contribution allowed if your MAGI (Modified Adjusted Gross Income) exceeds $110,000 ($220,000 for joint filers)

No limit

No contribution if MAGI exceeds $129,000 ($191,000 for joint filers)

No limit

Taxes

Contributions are not tax deductible. Federal tax-deferred earnings and withdrawals for qualified expenses.

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, assets become the child’s property at age 18.

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 Choice

No restrictions

No restrictions

No restrictions

No restrictions

Beneficiaries

Can be changed to another family member

Can be changed to another family member

Can be changed

Cannot be changed

NOT FDIC-INSURED

May lose value

No bank guarantee

Investment management, retirement, trust and planning services provided by COUNTRY Trust Bank®. Please see our Terms & Conditions for more information about COUNTRY Trust Bank and its affiliates.

 

1 Bureau of Labor Statistics.  (2013). "Education Pays"
2 The College Board, “Trends in College Pricing,” 2013.
3The 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.

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.

Registered Broker/Dealer offering securities products and services: COUNTRY® Capital Management Company, 1705 N. Towanda Ave, PO Box 2222, Bloomington, IL 61702-2222. tel (866) 551-0060. Member FINRA/SIPC