Starting today can make all the difference for your investors
A single choice can create opportunities, fuel passions and help make dreams a reality. Choosing to recommend Capital Group’s CollegeAmerica 529 plan can unlock a world of possibilities for investors by giving children the opportunity to explore their boundless potential, while easing mounting education costs.
Discover the benefits of our CollegeAmerica investment options
BENEFITS
- Among Morningstar’s highly rated advisor-sold 529 college savings plans since 2004, the year they began issuing ratings.†
- An attractive estate-planning vehicle, with tax benefits that allow you in 2023 to contribute up to $17,000 ($34,000 for married couples) annually without gift-tax consequences. Under a special election, you can invest up to $85,000 ($170,000 for married couples) at one time by accelerating five years’ worth of investments.
- Easy-to-use investment options managed by experienced professionals using The Capital SystemTM.
- Service and support to help you open, offer and service accounts.
- A nationwide plan sponsored by Commonwealth Savers℠, our longstanding state sponsor.
- A tax‐advantaged investment vehicle specifically designed to help investors save for college tuition and expenses, as well as K-12 private school tuition (up to $10,000 per year) and certain apprenticeship programs. (Tax-advantaged treatment applies to savings used for qualified education expenses. State tax treatment varies.)
- Anyone can open a 529 savings plan, regardless of how much money they make.
- High contribution limits allow clients to contribute until the account’s balance (including earnings) reaches $550,000.
- CollegeAmerica’s combination of features could outweigh the tax benefit one may receive for investing in other state-sponsored plans.
No additional gifts can be made to that beneficiary over the next four years after the year in which the one-time gift is made. If the donor of an accelerated gift dies within the five-year period, a portion of the transferred amount will be included in the donor’s estate for tax purposes. Consult with a tax advisor regarding your specific situation. Tax-advantaged treatment applies to savings used for qualified education expenses. State tax treatment varies. Tax deductions may be disallowed in the event of non-qualified withdrawals.
If withdrawals are used for purposes other than qualified education expenses, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax. States take different approaches to the income tax treatment of withdrawals. For example, withdrawals for K-12 expenses may not be exempt from state tax in certain states. Qualified education expenses include tuition for an elementary or secondary private or religious school (kindergarten through 12th grade) up to a maximum of $10,000 incurred during the taxable year per beneficiary. Qualified education expenses include expenses for fees, books, supplies and equipment required for the participation of a designated beneficiary in certain apprenticeship programs. They also include amounts paid as principal or interest (up to a $10,000 lifetime maximum) on any qualified student loans of a designated beneficiary or the designated beneficiary’s sibling. Please consult your tax advisor for state-specific details.
Availability
Financial professionals and education savers from all 50 states are using CollegeAmerica to save for education. CollegeAmerica is available in 529‐A, 529‐C, 529‐E, 529-F-1 and 529-F-2 share classes.
Explore the benefits of our employer-sponsored CollegeAmerica plans
A 529 savings plan can be part of an employer’s benefits package
Many employers want to help with the high costs of higher education. A 529-E plan can be an easy way for your business owner clients to do so, with no setup costs or mandatory contributions.
BENEFITS
- Offers an inroad to businesses with which you’d like to establish relationships and a way to develop broader and deeper client relationships with existing 401(k) plan sponsors.
- Provides administrative ease using options such as age-based target date funds and payroll deduction.
- Nets new assets with systematic employee contributions. Assets targeted at education savings are often sticky, long-term assets that are the foundation of many successful practices.
- Enables employers to provide an employee benefit with no setup costs for employers, and no up-front sales charge for participants.
- Minimal administration because employees manage their accounts directly with your plan’s financial professional.
- There is no minimum participation. While widespread employee participation is welcome, a single shareholder is enough.
Availability
Any employer with an employer identification number (EIN) is eligible to establish an employer-sponsored CollegeAmerica plan, and all employees, including part-time employees, are eligible to participate. Investors invest in the CollegeAmerica employer‐sponsored program using Class 529‐E shares.
529 setup and service
To set up a new CollegeAmerica 529, visit the Account Resource Center to easily access all of the required paperwork, resources and more.
529 Setup and Service
We've made setting up a CollegeAmerica 529 simple, so you can help unlock new worlds of possibilities for your clients and your practice.
† Source: Morningstar. Ratings are based on the following criteria: process, people, parent, price and, until 2022, performance. In 2022, Morningstar’s performance analysis takes place as part of a broader assessment of the people, process and parent criteria.