Investment Center
Saving For Education Expenses
| Vehicles | Contribution Limits | Control | Uses | Beneficiary | Income Limits | Tax Treatment | Ability to Change Beneficiary |
| 529 Plans: Contributions are invested and grow federal tax free. 529 higher education savings plans offer maximum flexibility on many levels. CLICK FOR MORE INFORMATION |
$150,000 -$200,000+ Depending on the plan you select May open with $50 to start | Owner maintains control. | Higher educations expenses such as tuition, books, room and board for college or graduate school. | Can be anyone. The beneficiary does not have to be related to you. | No income limits. | Grows tax free from federal tax. Withdrawals for qualified higher education expenses are free from federal tax. Non-qualified withdrawals are subject to income taxes and 10% penalty on earnings.** | Yes, must be blood relation |
| Coverdell Education Savings Account (ESA); formerly Education IRA Education account in which contributions grow tax free. CLICK FOR MORE INFORMATION | 2,000 per year, per beneficiary | Owner maintains control until beneficiary reaches age 30. | Education expenses such as tuition, books, room and board for elementary, high school, post secondary, graduate school. | Can be anyone | $110,000 Single $220,000 Married |
Grows tax free from federal tax. Withdrawals for qualified education expenses are free from federal tax. Non-qualified withdrawals are subject to income taxes and 10% penalty on earnings** | Yes, must be blood relation |
| Uniform Transfers Minor’s Act (UTMA) Custodial accounts in which securities are invested on behalf of a minor. CLICK FOR MORE INFORMATION |
No limit. | Custodian maintains control for the minor, until the minor reaches are 21. After age 21 the minor maintains control. | Assets can be used for anything as long as it’s for the minor’s benefit. | Can be anyone | No income limits. | Earnings on the account may be taxable at the minor’s and parents tax rate* | No, once assets are given to a minor they are irrevocable. |
*Consult with your tax advisor for specific tax information and recommendations.
**This tax benefit is effective through 2010 unless extended by Congress.
