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529 College Savings Plans - Saving for college

 

College Planning

 

With today’s rising costs for college and other education, it is never too soon to begin planning.



What Are College 529 Plans?

529 college savings plans are one of the most important financial and tax developments since the creation of the 401k plan. Section 529 college plans are a tax deferred method of making contributions for college. These plans offer numerous benefits to those who invest and are not just for parents and grandparents. Every investor should know the basics about these exciting plans.

The Fidelity Advisor 529 Plan is offered by the state of New Hampshire and managed by Fidelity Investments. If you or the designated beneficiary are not a New Hampshire resident, you may want to consider, before investing, whether your or the designated beneficiary's home state offers its residents a plan with alternate state tax advantages or benefits.

The ScholarShare Advisor College Savings Plan is offered by the ScholarShare Investment Board, an agency of the state of California, and managed by Fidelity Investments. If you or the designated beneficiary are not a California resident, you may want to consider, before investing, whether your or the designated beneficiary's home state offers its residents a plan with alternate state tax advantages or other benefits.


Note:
Atlantic Financial is not affiliated with Fidelity Investments, we are proud to offer their investment products and services to our clients.

FIDELITY ADVISOR 529 PLAN
Fact Sheet
Product Name: Fidelity Advisor 529 Plan
Sponsored By: The State of New Hampshire
Managed by: Fidelity Investments
Key Attributes:
Investment Choice


Fidelity Advisor 529 Plan offers eight Age-Based Portfolios, two Static Allocation Portfolios (100% equity and 70% equity), and 11 Individual Fund Portfolios. Participants (account owners) can work with an advisor to select from the Age-Based Portfolios and Static Portfolios, regardless of the beneficiary's age. They also have the option to allocate contributions across the 11 Individual Fund Portfolios based on the investor's goals and risk tolerance. Advisors may also recommend that Participants consider investing in the beneficiary's designated Age-Based Portfolio to take advantage of Fidelity's unique roll down structure when Age-Based Portfolios become more conservative as the beneficiary approaches college-age.
Federal Tax-Free Qualified Withdrawals and High Maximum Investment Limit


Funds grow tax-deferred and can be withdrawn federal income tax free for qualified higher education expenses1.


Maximum contribution limit is $250,000 for 2003.
Flexibility


Open to anyone, regardless of their state of residence2


Can be used for a range of qualified higher educational expenses (including costs such as books, required supplies and equipment, room, and board) in addition to tuition.


Can be used at most accredited post-secondary schools, anywhere in the United States or at eligible foreign institutions.


No income limits on participation.


Participants, usually parents or grandparents, maintain control of account and distributions.


Accepts UGMA and UTMA assets.
Credit Card Feature


Fidelity and MBNA America Bank, N.A. launched the Fidelity Investments 529 College RewardsSM Card, which may help accelerate college savings.

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2% of eligible retail purchases goes toward your Fidelity Advisor 529 Plan account3

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No limit on reward points you can earn

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No annual fee

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No restrictive vendor network

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Multiple cardholders can be linked to one designated Fidelity Advisor 529 Plan account.
Gift Tax Advantage


An individual can give up to $55,000 in one year to a Beneficiary without being subject to a gift tax.4
Availability: Through investment professionals nationwide.5
The Fidelity Advisor 529 Plan is offered by the State of New Hampshire and managed by Fidelity Investments. If you are not a New Hampshire resident, you may want to investigate whether your state offers its residents a plan with alternate tax advantages.
1
Pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"), qualified withdrawals are federal income tax free. The provisions of EGTRRA will expire on December 31, 2010. Unless the law is extended by Congress and the President, the federal tax treatment of 529 plans will revert to its status prior to January 1, 2002.
2
Residents of other states should check to see if their state offers a plans with alternate tax advantages for residents.
3
Earn rate may be subject to change. Other restrictions apply. Full details are included in the Program Guidelines document. For rate, fee, and other cost information, and to learn more about the benefits of the Fidelity Investments 529 College RewardsSM program, please refer to the online credit card application at www.advisorxpress.com or call 1-866-438-6262. This credit program is issued and administered by MBNA America Bank, N.A., which is not affiliate of Fidelity Investments.
4
In order for an accelerated transfer to a 529 Plan (for a given Beneficiary) of $55,000 (or $110,000 combined for spouses who gift split) to result in no Federal transfer tax and no use of any portion of the applicable Federal transfer tax exemption and/or credit amounts, no further annual exclusion gifts and/or generation-skipping transfers to the same beneficiary may be made over the five-year period, and the transfer must be reported as a series of five equal annual transfers on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. If the donor dies within the five-year period, a portion of the transferred amount will be included in the donor's estate for estate tax purposes.
5
FA 529 Plan Portfolios may only be offered to the public through intermediary financial services firms that have signed FA 529 Plan Selling Agreements with Fidelity.
Fidelity Investments Institutional Services Company, Inc.
82 Devonshire Street, Boston, MA 02109.



In addition to saving for college did you know that Creative IRA Roth planning can leave a significant tax free legacy for a young child?






 








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