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College Planning

For those with children or grandchildren, recommendations for college funding may be part of your overall financial plan.

The cost of a college education continues to increase and your ability to afford college tuition in the future will most likely depend on how much you set aside today. There are a variety of ways to save and invest for college, including investments that offer attractive tax advantages.

529 Plans

  • Tax-deferred earnings
  • Federally tax-free distributions for qualified higher education expenses
  • Some states offer tax-free distributions for qualified higher education expenses
  • When the account owner is a grandparent, the assets are not included in financial aid calculation

Coverdell Education Savings Accounts

  • Annual non-deductible contributions permitted
  • No tax on earnings for higher education withdrawals

Participation in a 529 College Savings Plan (529 Plan) does not guarantee that contributions and investment return on contributions, if any, will be adequate to cover future tuition and other education expenses or that a beneficiary will be admitted to or permitted to continue to attend an educational institution. Contributors to the program assume all investment risk, including potential loss of principal and liability for penalties such as those levied for non-educational withdrawals. An investor should consider, before investing, whether the investor's or designated beneficiary’s home state offers any favorable state tax treatment or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Consult with your financial, tax or other adviser to learn more about how state-based benefits (including any limitations) would apply to your specific circumstances. You may also wish to contact your home state or any other 529 college savings plan to learn more about the features, benefits and limitations of that state’s 529 college savings plan. Furthermore, the Tax Cuts and Jobs Act that was signed into law on December 22, 2017 allows for up to $10,000 a year per beneficiary in tax free distributions from a 529 Plan if used for tuition incurred for enrollment or attendance at a public, private, or religious elementary or secondary school. Check with your state’s guidelines prior to withdrawing the funds. For more complete information, including a description of fees, expenses and risks, see the offering statement or program description.