What is a 529 Plan?
The number 529 refers to the section of the Internal Revenue
Code that created qualified tuition plans. 401(k) plans are named
after a federal tax code section as well. While 401(k) plans are
tools for retirement savings, 529 plans are vehicles to help
families save to cover the cost of future higher education costs.
529 plans provide parents and grandparents a tax-advantaged way to
save for a loved one's college education. Families are encouraged
to start saving for college when children are very young to ensure
that they reach their college savings goals. Any earnings grow
tax-deferred and withdrawals for qualified higher education costs
(tuition, fees, books, certain room and board and equipment or
supplies required for attendance or enrollment at eligible
educational institutions) are tax-free.
Path2College 529 Plan
The Path2College 529 Plan is promoted by the State of Tennessee
and administered by the State of Georgia. It offers seven
investment options, with varying degrees of risk: The Managed
Allocation Option, the Aggressive Managed Allocation Option, the
100% Equity Option, the Balance Fund Option, the Fixed Income
Option, the Money Market Option and the Guaranteed Option. There is
no enrollment or administrative fees. Annual asset-based fees for
fund management are less than one percent; however, there is no
management fee for the Guaranteed Option. Accounts can be opened
with as little as $25. Additionally, the maximum account balance
limit for the Path2College 529 Plan is $235,000. As with any
investment vehicle, account value will fluctuate based upon a
number of factors, including overall market conditions. Funds can
be used at virtually any higher education institution in the U.S
and some colleges abroad. For more information, visit the Path2College 529 Plan website
.
529 Links