529 college savings plan
Save for higher education expenses now with a 529 college savings plan, available through the state-sponsored Workplace 529 College Savings Program.
- Earnings grow tax-deferred
- When it’s time to use the money, distributions for qualified higher education expenses—including tuition, books and related fees—are free of federal and California state income tax
- Any U.S. resident 18 years or older who has a Social Security or taxpayer ID number can open a 529 plan account
- No income restrictions
- Beneficiary can be changed to an eligible member of the original beneficiary’s family at any time without penalty
- Adults can use the program to save for their own qualified higher education expenses
- Minimum initial investment is $50 or just $15/month if you set up automatic deduction from a bank account… you may contribute up to $65,000 ($130,000 per married couple) per beneficiary in a single year without incurring a federal gift tax
- Once assets are in the account, they are generally excluded from your estate
- You maintain ownership of the assets until funds are withdrawn, which is done simply by completing a form
- You may withdraw funds from the account at any time for any reason, but you will incur income tax and an early-distribution penalty of 10% if you use the funds for something other than qualified higher education expenses
- Funds in California’s 529 Plan are managed by TIAA.
To find out more or to enroll, call (800) 544-5248 or visit www.scholarshare.com.