529 College Savings Plans
529 plans are flexible accounts specifically designed for college savings. Distributions
from a qualified 529 plan account are federal income tax-free. The plans were
named after Section 529 of the IRS code that created them.
All 529 plans are "state" sponsored meaning they are issued by a specific state.
This does not necessarily limit the investment choices available. Residents of
any state can invest in any plan.
Basic Principles of 529 Plans
1. Plans offer a choice of portfolios tailored
to a child's age or are customized on an asset allocation
Benefits of 529 Plans
2. Plans offer tax-deferred growth of earnings and federal income tax-free
qualified distributions; and
3. The money can be used for tuition, books, etc. at most accredited two- and
four-year colleges and universities, and vocational-technical schools nationwide
1. Anyone can open a 529 account to save for
a student's qualified higher education expenses;
Contribution Limits & Estate Planning
2. There are no income restrictions;
3. The beneficiary can be changed to an eligible member of the original beneficiary's
family at any time without a penalty;
4. The beneficiary doesn't need to be a child. Adults can use the plans to
save for their own qualified higher education expenses;
5. Residents from any state can open a 529 account in any state with a sponsored
6. Portfolios are professionally managed and diversified
1. Individuals may contribute up to $55,000
and married couples may contribute up to $110,000 per
beneficiary in a single year without incurring a federal
gift tax impact; and
Control of Assets & Distributions
2. Once the gift is made, the funds are generally not considered as part of
the donor's estate for tax purposes
1. The account owner (i.e. participant) maintains
ownership of the assets until withdrawn;
2. Distributions from 529 plan can be taken at any time for any reason; however,
if the funds are not used for qualified higher education costs, earnings will
be subject to federal income tax at the participant's rate and a 10% federal
3. If the beneficiary receives a scholarship, the scholarship amount can be
withdrawn from the 529 Plan and the 10% federal penalty tax on earnings will
not apply. However the earnings will be subject to income taxes at the participant's
4. Withdrawing money from a 529 plan is easy. Simply fill out a distribution
form with instructions on where the money should be sent, and submit it to
the plan sponsor for immediate processing
Shoreline's Competitive Edge
We are a network of independent professionals with over 150 years of combined
experience in wealth management and advice. Members of this network can be used
individually or collectively for a single program or a series of seminars or
workshops for your company or organization.
For more information:
If you'd like more information about how diversified investment advisors can help you achieve your financial objectives through personalized wealth or retirement and risk management strategies, please contact us. We welcome the opportunity to discuss your unique needs and how we may best meet them.
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Charles M. Bloom, Registered Principal offers securities
and advisory services through Centaurus Financial, Inc. - Member FINRA and SIPC - 775 Avenida Pequena, CA, 93111 (mailing address: 3905 State Street Suite 7173, Santa Barbara, CA, 93105) - CA Life Insurance License No. 0A52786 - Centaurus Financial, Inc. and Shoreline Wealth & Investment Management are not affiliated companies.
The information contained in this web site is neither an offer nor solicitation of any security or service.