The Big Difference a 529 Makes for Grandparents

529 college savings programs are state-sponsored plans that have a variety of tax benefits and other considerations that help you, as a grandparent, save for college tuition and other eligible expenses.

Even the experts agree that 529 college savings plans are one of the best ways for families, individuals, and grandparents to save:

  • State Tax Benefits: If you are a Colorado resident, every dollar you contribute to a CollegeInvest 529 can be deducted from your Colorado state income tax return.1
  • Federal Tax Benefits: Earnings grow tax free for both federal and state, so every dollar you save for college can work harder. And any withdrawal used for qualified higher education expenses aren’t taxed on your federal or state tax return.2
  • Nationwide Access: Savings can be used nationwide at any eligible public or private college, university, vocational or trade school.
  • Account Control: The account owner contols the assets throughout the duration of the account holdings. And, the account owner decides when and how the money is withdrawn. Other custodial savings options relinquish control of the funds to the beneficiary when they reach the age of 18 or 21. 
  • Beneficiary Options: You can change the beneficiary on the account at anytime. If for some reason your grandchild decides not to attend college or receives scholarships, the account’s beneficiary can be changed to someone else in the family3. Or, the funds can be left in the account to be used at a later date since there are no time requirements to use the funds.
  • Easy to Open: Accounts can be opened in minutes with as little as $25. And automatic transfers or direct deposits to your account make saving easy.4

 

529 Gifts for Your Grandchildren's College Education

Anyone can make a contribution directly into a CollegeInvest savings plan with the right information and as long as it is an accepted form of contribution for the plan, as shown below.

Here’s how you, as a grandparent, can contribute to a CollegeInvest savings account:

Direct Portfolio      

  • Anyone can make a direct contribution to a Direct Portfolio 529 savings account
  • Minimum amount needed: $15
  • Contributions can be made by check (no third party checks)
  • The contribution must include the account number 

Direct Portfolio Direct Contribution Information

  
Scholars Choice     

  • Anyone can make a direct contribution to a Scholars Choice 529 savings account
  • Minimum amount needed: $50
  • Contributions can be made by cash, check, by phone or online
  • The contribution must include the account number
  • Checks should be made payable to: Scholars Choice
  • Please note: the account owner may be subject to specific fees for contributions made directly by others  

 Scholars Choice Direct Contribution Information


 Smart Choice

  • Anyone can make a contribution to a Smart Choice 529 savings account
  • No minimum amount needed
  • Contributions can be made by cash, check (no third party checks), bank transfer, electronic funds transfer (EFT), or by online account transfer through another FirstBank customer
  • Contributions can be made in person at any FirstBank location, by mail, or by wire transfer and must include the account number


Stable Value Plus  

  • Anyone can make a direct contribution to a Stable Value Plus 529 savings account
  • Minimum amount needed: $25
  • The contribution must include the account number

 

A word of caution – account owners should not reveal or release specific account numbers or any other private information to someone they don’t trust in earnest, to avoid any chance of complications or unintended activity.


1 Contributions to the Plan(s) are deductible from Colorado state income tax in the calendar 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.

Important Considerations
To learn about CollegeInvest’s 529 program, its objectives, risks, charges, expenses, limitations, restrictions and qualifications regarding the program's benefits and potential tax advantages, please read and consider carefully the Plan 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.

Investments are not guaranteed by CollegeInvest, the State of Colorado, its agencies, The Vanguard Group, Inc., Upromise Investments, Inc., Legg Mason Global Asset Allocation, LLC, or FirstBank, and may lose value, including principal amount invested. The guarantee of Stable Value Plus College Savings Plans is the obligation of MetLife and only to the extent of the Funding Agreement. Smart Choice College Savings Plans are not insured by CollegeInvest, the State of Colorado, or its agencies. However, these funds are FDIC-insured in accordance with the current FDIC coverage limits.


Capacity of Dealer and Other Parties
CollegeInvest is the issuer of plan securities and is the trustee of the plans in accordance with Colorado law. CollegeInvest also oversees the Managers' activities and provides certain administrative services, such as marketing, audit, and financial statements, in connection with the plans.

Upromise Investments, Inc. serves as Plan Manager for the CollegeInvest Direct Portfolio College Savings Plan and has overall responsibility for the day-to-day operations. The Vanguard Group, Inc. also serves as Plan Manager and Investment Manager for the CollegeInvest Direct Portfolio College Savings Plan, and Vanguard Marketing Corporation, an affiliate of The Vanguard Group, Inc., assists CollegeInvest with marketing and distributing the Direct Portfolio Plan. The Direct Portfolio Plan’s portfolios, although they invest in Vanguard mutual funds, are not mutual funds and you could lose money by investing in the plan.

Legg Mason Global Asset Allocation, LLC, Investment Manager for the CollegeInvest Scholars Choice College Savings Program. Legg Mason Investor Services, LLC is the primary distributor of interest in the Program; together they serve as Manager of the Program.

FirstBank serves as the Plan Manager for the CollegeInvest Smart Choice College Savings Plan and has overall responsibility for the day-to-day operations, including effecting transactions. FirstBank also assists CollegeInvest with marketing and distributing the CollegeInvest Smart Choice College Savings Plan. FirstBank - Member FDIC.

The MetLife Insurance Company serves as the Investment Manager for the CollegeInvest Stable Value Plus College Savings Plan. CollegeInvest has overall responsibility for the day-to-day operations, including effecting transactions.

CollegeInvest and the CollegeInvest logo are registered trademarks of CollegeInvest. CollegeInvest Direct Portfolio College Savings Plan, Scholars Choice, CollegeInvest Smart Choice College Savings Plan, and CollegeInvest Stable Value Plus College Savings Plan are registered service marks of CollegeInvest. Vanguard is a trademark of The Vanguard Group, Inc. Upromise is a registered service mark of Upromise, Inc.