Why 529s?

These three numbers can equal big savings.

529 college savings programs are typically state-sponsored plans that carry a variety of tax benefits and other considerations that help save for college tuition and other eligible education expenses. Experts agree they’re one of the best ways for families and individuals to save for higher education:

• Colorado State Specific Tax Benefits:  Colorado residents are allowed to deduct every dollar contributed to a CollegeInvest 529 account from their Colorado state income tax.¹
• Federal and State Tax Benefits: Withdrawals used for qualified higher education expenses are not taxed on federal or state tax returns.² Earnings grow federal and state tax free as well.
• Account Control: The account owner (likely the employee) maintains control of the assets and decides when and how the money is withdrawn.
• Beneficiary Options:  If the student/beneficiary decides not to attend college, the account owner can name a new beneficiary. Beneficiaries can be changed at anytime, and as many times as desired.  An account owner can also be the beneficiary and use the funds for themselves!³

So, what else makes 529 plans a great savings choice?

• Savings can be used nationwide at any eligible public/private college, university, vocational or trade school.
• Accounts can be opened with as little as $15 when establishing a direct deposit account.
• Automatic transfers make adding additional funds easy.⁴
• There are no income limitations for account holders and anyone with a social security number can participate.
• Maximum contribution limit of $350,000. ⁵

 ¹ Contributions to the Plan(s) are deductible from Colorado state income tax in the tax year of the contribution, up to your Colorado taxable income for that year.  Such deductions are subject to recapture in subsequent years in which non-qualified withdrawals are made.

 ² The earnings portion of a non-qualified withdrawal is subject to federal income taxes and any applicable state income tax, as well as an additional 10% federal penalty tax.

 ³ Restrictions apply. Please see the Plan Disclosure Statements.

 ⁴ A plan of regular investment cannot assure a profit or protect against a loss in a declining market. 

 ⁵ The combined maximum account balance limit for all 529 plans established and maintained by the State of Colorado for a particular beneficiary cannot exceed $350,000. Although account balances can grow beyond that amount, no additional contributions can be made once the balance reaches $350,000. 

Important Considerations

To learn about CollegeInvest’s 529 program, its objectives, risks, charges, expenses, limitations, restrictions and qualifications regarding the Plans’ benefits and potential tax advantages, please read and consider carefully the Program Disclosure Statements (PDS) available at www.collegeinvest.org before investing. Also, check with your or your beneficiary’s home state to learn if it offers tax or other benefits for investing in its own plan. Administered and issued by CollegeInvest.

CollegeInvest and the CollegeInvest logo are registered trademarks of CollegeInvest.