College savings: What professionals need to know
A college savings solution offering tax advantages and a wide range of investment options for over 20 years.
- A direct-sold plan well-suited to the priorities of financial professionals: Low expenses, a disciplined investment approach as well as support and services tailored to the needs of advisors.
- Maximum Minnesota taxpayer benefits: Tax-free growth and distributions when used for qualified higher education expenses. A Minnesota state tax deduction of up to $3,000 per year if married filing jointly ($1,500 filing single), or tax credit amount up to $500, subject to phase-out based on certain federal adjusted gross income thresholds. If the funds aren't used for qualified higher education expenses, a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply.
- Flexible use options to help minimize impact of changing client needs or priorities: Approved for a wide range of educational experiences and expenses that can be used nationwide and for many schools abroad. Change eligible beneficiaries or simply withdraw assets for any reason (federal and state taxes and penalties may apply if not used for qualified education expenses).
- A disciplined set of investment options: Full suite of self-adjusting Enrollment Year Investment Options that utilize a progressive glidepath, creating a more gradual shift in asset allocation. In addition, MNSAVES offers Multi-Fund and Single-Fund Investment Options, allowing for more control over allocations, and the Principal Plus Interest Option, allowing for more control over allocations. Investment Options are managed by a dedicated 529 investment team and use funds from leading asset managers.
- Estate tax and legacy planning benefits:
- Estate tax exempt. Kiddie tax exempt. Generation skipping tax exemption eligible.
- Able to seed account with large upfront contribution – a lump sum gift of $85,000 if you’re a single filer or $170,000 if you’re married and pro-rate the gift over five years per the federal gift tax exclusion (as of 2023).
- No limit of number of accounts/beneficiaries.
- Account owner maintains control over assets.
- Simplified 529 account management: Access client data easily and quickly with Ascensus QuickView.
- Planning tools and sharable resources: For example, use our College Savings Calculator to explore funding scenarios considering age, contribution levels, school choice as well as your assumptions for ROI and cost inflation.
What can you do?
- Include college savings as part of your periodic goal discussions.
- Encourage your clients to have dedicated college savings accounts, as this may reduce the temptation to use retirement assets for college savings.
- Make sure college savings are invested in vehicles with appropriate risk-reward profiles, and that your clients take advantage of available tax benefits.
- Use our Enrollment Year Investment Options on their own or fine-tune their risk/global exposure by mixing with an allocation of our Multi-Fund or Single-Fund Investment Options.
Manage your client’s accounts with 529 QuickView®
Need some help?
Give us a call877-338-4646
Monday - Friday
7:00 AM - 7:00 PM CT
For those with a hearing impairment, please contact us at the number above via a relay service. Translation services available upon request.
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