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College Funding Planning

Invest in a brighter future

Whether it's saving for yourself or for a child, the gift of education can have lasting benefits. There are many ways to save for college. Let's compare what those options are. 

529 College Plans

529 College Plans



529 College Plans

529 College Plans

What are the benefits?

  • Tax advantages — Assets grow tax free from federal, and in many cases, state taxes as long as withdrawals are used to pay for qualified education expenses. 

  • Flexibility — You (the account owner), rather than the beneficiary, maintain control of the account and determine the timing and amount of distributions. You also have the ability to change beneficiaries. 

Who can contribute?

  • Parents
  • Grandparents
  • Beneficiaries
  • Extended family and friends

Examples of qualified education expenses

<sup>Tuition &#38; related fees</sup>

Tuition & related fees

• Trade and vocational schools
• Community colleges
• Theological seminaries
• International schools
• Study-abroad programs run through U.S.-eligible schools

<sup>Room and board</sup>

Room and board

On and off campus

<sup>Books &#38; supplies</sup>

Books & supplies

• Textbooks
• Paper
• Pens
• Additional supplies

<sup>Computers &#38; supplies</sup>

Computers & supplies

• Computer
• Laptop
• Printer
• Educational software
• Internet services

UTMA/UGMA Accounts

UTMA/UGMA Accounts

These accounts stand for Uniform Transfer to Minor Act (UTMA) and Uniform Gift to Minor Act (UGMA). Both accounts allow parents to save money and invest, maintain full control until their child is an adult. These allow you to transfer financial assets to a minor without establishing a trust.

What are the benefits and/or disadvantages?

  • Financial Aid — Compared to 529 college savings plan, UTMA/UGMA account have a less favorable financial aid impact. When it comes time to fill out the FAFSA (Free Application for Federal Student Aid), UGMA and UTMA accounts are reported as a child’s asset, reducing aid eligibility by 20% of the asset value.

  • Flexible Spending — Funds can be used for anything that benefits the child. 

  • Tax Implications — Contributions are made with after-tax dollars. A person can contribute up to $16,000 annually without incurring a gift tax ($32,000 per married couple). The first $1,150 of a child’s unearned income is tax-free. The next $1,150 is taxed at the child’s rate. Anything over that is taxed as the parent’s income. 

Contact one of our financial professionals to discuss which option is best for you and your child. 

Talk to a financial professional