The 529 College Savings Plan allows you to save and invest on a tax-advantaged basis for future educational expenses. 529 College Savings Plans were created by Congress to help parents and grandparents set aside money for their children or grandchildren's education while enjoying tax advantages and growth potential that aren't available with traditional savings accounts. Even if you don't have a lot of money to invest right away, 529 plans are a great way to get started. With as little as $25 a month, you can begin saving today, and put your money to work.

Significant tax advantages
There are significant tax advantages when you save through the 529 College Savings Plan. Investment earnings accumulate federal income tax-deferred until the money is withdrawn, meaning that your savings are able to grow faster than comparable taxable accounts. In addition, investment earnings will be distributed federal income tax-free when used for qualified higher education expenses.*

Control over assets
Unlike other savings plans that transfer control of the assets once the child reaches a certain age, the 529 College Savings Plan allows the account owner to maintain control over the assets for the life of the account.

Broad use of assets
Assets from the 529 College Savings Plan can be used to pay for qualified higher education expenses such as tuition, fees, room and board, books and supplies at any accredited post-secondary institution in the U.S. This includes 2-year and 4-year undergraduate programs, technical schools, plus graduate and professional schools.

Penalty-free withdrawals
Principal can be withdrawn from the 529 College Savings Plan without penalty if the beneficiary receives a scholarship or in the event of death or disability of the beneficiary. Ordinary income taxes would be owed on investment earnings and would be included in gross income.

* Although previously there existed a "sunset provision" that would have eliminated the federal tax benefits in 2010, under new legislation, qualified distributions from 529 plans are now permanently federally tax-free. As with all tax-related decisions, consult your tax advisor. Withdrawals for expenses other than qualified education expenses are subject to income tax and an additional 10% penalty on earnings. You should consider a 529 Plan's fees and expenses, such as administrative fees, enrollment fees, annual maintenance fees, sales charges, and underlying fund expenses, which will fluctuate depending on the 529 Plan invested in and the investments chosen within the plan. You should also consider the inherent risks associated with investing in 529 Plans, such as investment return and principal fluctuation, which will also vary based on the investments made within the plan. More information is available in each plan's official statement. The official statement should be read carefully before investing.

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