529 Savings Plans
Facts on 529 plans
Use any state's plan
Invest in ANY 529 plan and use plan assets at ANY eligible school around the country or abroad.1
529s are for more than college tuition
529 plans are flexible. Account assets can be used to pay for many qualified education expenses.
Easily transfer plan benefits.
Unlike other education savings and investment options, a 529 account owner controls the account. That means the account owner can change the beneficiary to another eligible member of the family.
Why 529 plans?
Next to retirement, saving for education is the second most important goal for many investors. 529 plans serve as a way to invest and save for education while providing additional tax benefits.
Explore the potential advisor and client benefits, and how BlackRock 529s can support education savings needs.
What 529 plans cover
529 plans can be used for:
- Saving for a child, grandchild, or other student’s education
- Tuition expenses up to $10,000 annually for K-12 public, private, or parochial schools2
- Graduate school, continuing education courses, apprenticeship programs3
- Student loan repayments4
- Tuition, room and board, fees, books, and supplies5
- Computer equipment and technology5
Look out for tuition increases
Sources: BlackRock; College Board, “Trends in College Pricing and Student Aid 2021.” Figures include tuition, fees, room and boa rd. Figures for age 18 based on costs for 2021 2022 academic year. Assumes a 5% price increase accounting for inflation and is for illustrative purposes only. As of 09/15/2022.
Between academic years 1991-92 and 2021-22, average tuition fees rose at public and private nonprofit four year institutions, after adjusting for inflation.
As tuition rates continue to increase, 529 plans provide a way for families to save for the cost of education while enjoying tax benefits.
The contributions made to the account grow tax free, and withdrawals used for qualified education expenses are also tax free. Additionally, some states offer tax deductions or credits for contributions made to 529 plans. Costs are projected to escalate by 8% each year and have exceeded annual inflation rates. Early and consistent investing in a 529 plan helps prepare clients for the rising cost of education and provide resources for the long term.
529 plan benefits for advisors
Consider the benefits for your practice when making 529s an everyday part of your client conversations
- Develop relationships with the next generation of clients
- Apply a strategic estate planning lens
- Pave the way to a whole portfolio conversation
- Prepare clients for education and retirement
- Provide “tax-alpha” to your clients
Take advantage of state tax benefits
These states offer a tax deduction for contributing to any 529 plan, including out of state plans, which may be more attractive than the in-state option.
These states offer no 529 state income deductions or income tax credits for 529 plan contributions.
These states offer potential tax breaks on contributions made only to in-state 529 plans
BlackRock 529 plans
Learn about the 529 plans BlackRock has to offer.
Well, good morning.
I picked my own outfit.
I love it.
Mommy, guess what?
What, baby?
I picked a college. And it's really far away.
When did you grow up?
Yep, I'm a grown-up.
Someday, she really is going to college. So start saving with Ohio's tax-free 529 plan. We make it simple to get your plan on track to meet any savings goal. Someday starts at BlackRock.com/CollegeAdvantage.
An investor should consider the investment objectives, risk, charges, and expenses associated with the municipal fund based securities before investing. More information about municipal fund securities is available in the issuers program description. You may obtain a program description by visiting www.BlackRock.co m/CollegeAdvantage, calling 866-529-8582, or by contacting your financial advisor. The program description should be read carefully before investing.
CollegeAdvantage 529 Plan
Cost: One of the lowest cost advisor-sold 529 plans.8
Choice: Match investment strategies with your clients' goals.
Flexibility: Use any iShares® ETF or BlackRock mutual fund.
BlackRock CollegeAdvantage is 1 of 3 plans awarded a medal rating by Morningstar, out of 30+ advisor-sold 529 plans.9
Hi, my name is Paul Colasante In my over 20 years as a financial representative, I’ve had the opportunity to meet with many different people who are at different stages of their lives.
Recently, I had a meeting with a young family. While we were discussing their financial situation and goals, the conversation turned to if they were planning to save for their children’s education.
We discussed the pros and cons of several options like regular savings, UTMAs, UGMAs, Roth IRAs, and 529s.
My clients liked the 529 plan for the ability to use it for a wide range of qualified education expenses, the tax benefits and the ability to change the beneficiary and maintain control of the account—just to name a few.
We reviewed which investments were best for their situation and then I walked them through the account opening process.
The clients were happy we were able to help them with the funding of their children’s education and that they had someone they could contact through the process. And it was pretty special for me to be part of this investment in their child’s bright future.
So, how can you get started? To learn more about a section 529 plan or NextGen 529, contact your financial professional.
To learn more about NextGen 529, its investment objectives, risks and costs, read the program description available at NextGen for ME dot com. Check if your home state has a 529 plan that offers tax or other benefits.
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NextGen 529
NextGen 529 is designed specifically with the needs of investing for education in mind.
High contribution limit: Contribute a maximum of $520,000 per beneficiary.
Convenient investing: Make automated bank transfers or payroll deductions.
Flexibility: choose from the largest number of investment options in any advisor-sold 529
plan.
529 College savings estimator
1. Distribution must be used to pay for qualified higher education expenses at an eligible educational institution. Eligible educational institutions include colleges and universities that are eligible for Title IV federal student aid.
2. Considered a qualified expense for U.S. tax purposes. For state tax treatment, check your individual state guidelines. Not all states consider this a qualified expense.
3. Covers cost of continuing education courses at any federally accredited institution. Covers expenses for books, supplies, and equipment required for a program registered with the U.S. Department of Labor.
4. Amounts paid as principal or interest on a qualified education loan. Amount that may be treated as qualified expense shall not exceed $10,000 as a lifetime cap per beneficiary.
5. Expenses for room and board and computer equipment and technology are subject to certain eligibility requirements.
6. Not all states offer tax benefits.
7. The 529 account must have been maintained for at least 15 years, and the distribution cannot exceed the aggregate amount contributed to the program (and earnings) before the five-year period ending on the date of the distribution. Although the amount that may be transferred may not exceed either the Roth IRA dollar limit or the amount of compensation the designated beneficiary earned that year, the income limits applicable to Roth IRA contributions are not applicable. This provision applies starting in 2024.
8. Source: Strategic Insight. October 2019.
9. BlackRock CollegeAdvantage has been awarded the Bronze medal rating as of November 2, 2022. The Morningstar Analyst RatingTM for 529 plans is expressed on a five-tier scale running from Gold to Negative. The top three ratings of Gold, Silver, and Bronze all indicate that Morningstar analysts think highly of a 529 plan. The difference between them corresponds to differences in the level of analyst conviction in a plan’s ability to continue following best practices and offer investments that will collectively outperform peers on a risk-adjusted basis over a holding period of at least five years. Morningstar analysts look for plans that follow several best practices across key pillars of evaluation, including but not limited to: ensuring the age-based or target-enrollment options utilize a well-researched asset-allocation approach and a robust process for selecting underlying investments; offering an appropriate set of options to meet investor needs; hiring a skilled investment management team to oversee the lineup; utilizing talented investment managers that underpin the investment options; tapping investment managers with exemplary stewardship practices; strong oversight from the state; keeping fees low relative to peers. For more detailed information about Morningstar’s Analyst Rating for 529 Plans please go to https://www.morningstar.com/content/dam/marketing/shared/pdfs/Research/962834.pdf. The Morningstar Analyst Rating for 529 Plans should not be used as the sole basis for evaluating a 529 plan.
Investing involves risk, including possible loss of principal. Asset allocation models and diversification do not promise any level of performance or guarantee against loss of principal. Investment in the funds is subject to the risks of the underlying funds.
Any investment in a BlackRock CollegeAdvantage mutual fund-based investment option is not insured or guaranteed by the FDIC or any other governmental agency or other party, including the custodian/state of Ohio, the Tuition Trust, BlackRock or any of the mutual fund firms under contract with the Ohio Tuition Trust Authority.
An investor should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. More information about municipal fund securities is available in the issuer’s Program Description. You may obtain a Program Description by visiting blackrock.com/529 or calling 866-529-8582. The Program Description should be read carefully before investing.
NextGen 529 is a Section 529 plan administered by the Finance Authority of Maine (FAME). You may obtain the NextGen 529 Program Description by visiting NextGenforME.com or calling the program manager at 1-833-336-4529. The Program Description should be read carefully before investing
NextGen 529 and NextGen are trademarks of the Finance Authority of Maine.
The Program Description contains more complete information, including investment objectives, charges, expensesand risks of investing in NextGen 529, which you should carefully consider before investing. If you are not a Maine resident, you also should consider whether your or your designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s 529 plan. NextGen 529 accounts are not bank deposits and are not insured by the Federal Deposit Insurance Corporation (FDIC). Returns on investments in NextGen 529 accounts are not guaranteed or insured by the State of Maine, FAME or any NextGen 529 service providers. NextGen 529 participants assume all investment risk of an investment in NextGen 529, including the potential loss of principal and liability for tax penalties that are assessable in connection with certain types of withdrawals of amounts invested in NextGen 529.
Vestwell State Savings, LLC (“Vestwell”) is the program manager, The Bank of New York Mellon is the program custodian, BlackRock Advisors, LLC is the program investment manager, and BlackRock Investments, LLC is the program distributor and underwriter.
Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S., federal, state or local tax penalties.
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