529 college savings plan

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529 College Savings Plan

An account into which persons deposit funds to save for university-related expenses. The funds in a 529 college savings account are tax-deferred and, if used directly to pay for college, tax exempt at the federal level. They are sometimes exempt at the state level as well. The plan exists in an attempt to make post-secondary education more affordable. See also: IRA, 401(k).

529 college savings plan.

Each 529 college savings plan is sponsored by a particular state or group of states, and while each plan is a little different, they share many basic elements.

When you invest in a 529 savings plan, any earnings in your account accumulate tax free, and you can make federally tax-free withdrawals to pay for qualified educational expenses, such as college tuition, room and board, and books at any accredited college, university, vocational, or technical program in the United States and a number of institutions overseas.

Some states also exempt earnings from state income tax, and may offer additional advantages to state residents, such as tax deductions for contributions.

You must name a beneficiary when you open a 529 savings plan account, but you may change beneficiaries if you wish, as long as the new beneficiary is a member of the same extended family as the original beneficiary.

In most cases, you may choose any state's plan, even if neither you nor your beneficiary live in that state. There are no income limits restricting who can contribute to a plan, and the lifetime contributions are more than $300,000 in some states.

You can make a one-time contribution of $60,000 without incurring potential gift tax, provided you don't make another contribution for five years. Or, you may prefer to add smaller amounts, up to the annual gift exclusion.

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NASDAQ: MORN), a leading provider of independent investment research, today announced new Analyst Ratings and reports for 63 of the nation's largest 529 college-savings plans.
This year, Morningstar manager research analysts awarded four Gold ratings, seven Silver ratings, 18 Bronze ratings, 32 Neutral ratings, and two Negative ratings to 529 college-savings plans.
Overall, the 529 savings plan industry remains on solid footing," Leo Acheson, Morningstar's lead research analyst for 529 college-savings plans, said.
SM] aggregates data from more than 70 529 college-savings plans and delivers it to portfolio accounting platforms.
529 college-savings plans, which had nearly $218 billion in total assets under management as of Dec.
As assets in college-savings plans continue to grow, we're focused on helping college savers select the best program to meet their goals," Leo Acheson, a Morningstar analyst and the study's lead author, said.
NASDAQ: MORN), a leading provider of independent investment research, today announced new Analyst Ratings, research, and reports for 64 of the nation's largest 529 college-savings plans.
ByAllAccounts, a Morningstar company, aggregates data from more than 50 529 college-savings plans and delivers it to portfolio accounting platforms.

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