College Savings Planning Service Overview
A child’s education is the key to their future. Whether your child has big aspirations and you want to contribute more or you want to lessen the burden on your child in the future, at Magellan Financial, we offer a variety of college savings plans that can help fit both you and your child’s needs.
College Savings Plans We Assist With:
Coverdell Education Savings Accounts (ESA)
529 Plan – Saving for Education
“Building the assets you’ll need to fund a child’s or grandchild’s education is a challenge, but you may be able to meet it by contributing to a 529 plan.”
A 529 plan is one of the education savings plans that we offer. 529 plans potential tax deferred savings, are low maintenance, flexible, and everyone is eligible to take advantage of this type of savings plan. More specifically, the beneficiary can use 529 plan account balances at any eligible postsecondary educational institution in the United States or certain schools abroad for qualified expenses. Qualified expenses cover tuition, room and board, books, equipment, and supplies related to enrollment or attendance at the eligible institution. The account owner retains control of the assets and can change beneficiaries within the designated beneficiary’s family at any time without penalty.
Please consider the investment objectives, risks, charges and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest.
The availability of such tax or other benefits may be conditioned on meeting certain requirements
529 Plans are subject to enrollment, maintenance, administrative and management fees and expenses.
Non-qualified withdrawals are subject to federal and state income tax and a 10% penalty.
College savings plans offered by each state differ significantly in features and benefits. The optimal plan for each investor depends on his or her individual objectives and circumstances. In comparing plans, each investor should consider each plan’s investment options, fees and state tax implication.
Other Education Savings Plans
The Uniform Transfers to Minors Act (UTMA) are types of custodial accounts that are set up by an adult on behalf of a minor. All the money and assets (e.g. mutual funds, stocks, bonds, Certificates of Deposits, etc.) in these types of accounts are turned over to the beneficiary’s control at a certain age. A Coverdell ESA is a trust or custodial account created only for the purpose of paying the education expenses of the designated beneficiary of the account. This account allows you to make an annual non-deductible contribution to a specially designated investment trust account. Your account has the potential to grow free of federal income taxes and withdrawals from the account may be completely tax-free as well if used for qualified education expenses prior to age 30.
Qualified Coverdell Education Savings Account distributions are not subject to state and local taxation in most states.
We take the time to assess your individual situation and which options would be the most beneficial for you and your child. Contact Us to help you and your child plan for their future education.
Please note: This material has been prepared for informational purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. The accuracy and completeness of this information is not guaranteed and is subject to change.
Wells Fargo Advisors Financial Network and its affiliates do not provide legal or tax advice. Transactions requiring tax consideration should be reviewed carefully with your accountant or tax advisor. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.