When it comes to families investing in the futures of their children or grandchildren, nothing seems more daunting than the sticker shock of college tuition. The universal truth of the rising costs of education can make parents feel uneasy, unsure of what to do to save enough money for their children’s tuition. This is one of the biggest reasons why less than half of Americans have an education savings plan. Many think they’ll have enough time to kick the can down the road and deal with it later.

Financial professionals are in a good position to help families make the right choices and build a good plan to meet education savings goals. An important tool in meeting this goal is the 529 plan. While most people may have a general understanding of what a 529 plan does, giving them information about the advantages of a 529 plan can help parents gain peace of mind and encourage them to make smarter investment choices. When discussing the benefits of a 529 plan, be sure to cover the following exciting advantages.

Benefits of a 529 Plan

  • Tax advantages

Earnings on a 529 plan aren’t taxed by the government and many states offer tax credits or deductions on 529 contributions.

 

  • Flexibility and control

Beneficiaries of a 529 plan can change easily; that means that if a student has already finished their education and funds are still available, a new beneficiary can be named to use those funds. The account owner, not the beneficiary, is in control of the distributions to ensure proper use of funds.

 

  • Minimal impact on financial aid

Students can still apply for financial aid and the earnings on a parent-owned 529 won’t be counted as income on the FAFSA.

 

  • More than just college…not just for kids

A 529 plan is usually known as a college savings plan, but a 529 plan can be used for any type of schooling, even K-12 education. Also, there are no limits on who can be the beneficiary, so even parents can take advantage of 529 earnings.

 

  • Family and friends can help

Anyone can contribute to a 529 plan, making it a great choice for a gift contribution.

 

  • No expiration

The earnings of a 529 plan never expire. Since beneficiaries can be changed, a 529 plan can be given to other family members for as longs as funds are available.

 

Advantages of Invesco CB529 Plans

Invesco CollegeBound 529 plans offer a wide range of investment options to maximize earnings for education. Actively managed by Invesco financial professionals, these portfolio options meet the needs of client capability and risk tolerance.

 

  • 3 tier investment portfolio options
    • Age-based
      • Grows, changes and adapts to align with their child’s expected year of college
    • Target risk
      • Portfolios comprised of a blend of active and passive funds that match the investor’s level of risk: conservative, moderate, and growth
    • Individual
      • Individual portfolios to give access to equity, fixed income, and capital preservation options

 

  • Dedicated team of Education Savings Consultants ready to support your 529 business-building efforts.
    • Access to dedicated team of field and internal education specialists.
    • Access to webcasts, digital tools and other materials from Invesco’s dedicated 529 team.

 

Invesco offers a wide range of resources for financial professionals to best meet the needs of their clients. Learn more.

 

 

NA1915

Not a Deposit   Not FDIC Insured  Not Guaranteed by the Bank  May Lose Value  Not Insured by any Federal Government Agency

Before you invest, consider whether your or the 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 that state’s qualified tuition program.
 
For more information about CollegeBound 529, contact your financial advisor, call 877-615-4116, or visit
www.collegebound529.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Invesco Distributors, Inc. is the distributor of CollegeBound 529.

Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements and certain withdrawals are subject to federal, state, and local taxes.

Invesco Distributors, Inc. does not provide legal or tax advice. This information is provided for general educational purposes only and is not to be considered legal or tax advice. Investors should consult with their legal or tax advisors for personalized assistance, including information regarding any specific state law requirements.

Related Insights

   

Asset transfer: Serving the next generation, today

529s can be a powerful tool for financial professionals looking to get involved with the next generation.

View Article

A dynamic risk profile tool can help with portfolio decision-making

Defined contribution (DC) plan participants are very interested in risk assessment tools that can help identify their risk tolerance and select the right strategy.

View Article

Expand Your College Savings Toolbox

Explore resources to educate your clients and take your business further with Collegebound 529.