Higher Education Flipbook_2024

As with other investments, there are generally fees and expenses associated with participation in a 529 savings plan and a Coverdell savings account. There is also the risk that the investments may lose money or not performwell enough to cover college costs as anticipated. Nonqualified withdrawals of earnings may be taxed as ordinary income and subject to a 10% federal income tax penalty. The tax implications of a 529 savings plan should be discussed with your legal and/or tax advisors because they can vary significantly from state to state, and some states may not adopt the 529 savings plan provision for K–12 tuition. Also be aware that most states offer their own 529 plans, which may provide advantages and benefits exclusively for their residents and taxpayers. These state benefits may include financial aid, scholarship funds, and protection from creditors. Before investing in a 529 savings plan, please consider the investment objectives, risks, charges, and expenses carefully. The official disclosure statements and applicable prospectuses —which contain this and other information about the investment options, underlying investments, and investment company— can be obtained by contacting your financial professional. You should read these materials carefully before investing. • Annual contribution limit: $2,000 per child (under age 18) • Income eligibility limits (based on donor’s adjusted gross income) • Assets must be used by the time the beneficiary reaches age 30 (with some exceptions) • Funds may be used for qualified elementary, secondary, and higher-education expenses • Flexible investment options Coverdell Savings Account • Higher contribution limits (set by each state) • No income eligibility limits • Typically no beneficiary age restriction (open to adults and children) • Funds may be used for qualified higher-education expenses and K–12 tuition • Limited investment options; some age-based options automatically become more conservative as the child ages 529 Savings Plan