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529 College Savings Plan - A Powerful Way to Pay for College

Next to retirement planning, paying for a college education could be the single largest expense that a family will bear. The 529 College Savings Plan is an effective and flexible investment opportunity to help families save for a college education.

Potential benefits of the 529 Plan include:

  • Federal tax-free earnings, meaning earnings are not taxed when they are withdrawn provided they are used for qualified higher education expenses.*
  • Tax-deferred earnings in Connecticut and many other states.**
  • A substantially higher investment limit than the annual limit available through a Coverdell Education Savings Account.
  • No income restrictions.
  • Any U.S. citizen or permanent resident, including parents, grandparents, other family members and friends, can contribute.
  • Savings can be used at any accredited institution of higher learning as well as at many foreign institutions.
  • There is no cap on the account balance and contributions can be made until the total value (contributions and earnings) of all accounts for one beneficiary equals about $265,000. This "ceiling" may change each year to reflect the increasing cost of higher education. Of course, the earnings can continue to grow in excess of this limit.
  • A special gift tax exclusion allows for contributions up to $60,000 for each beneficiary in a single year ($120,000 for married couples) without federal gift tax consequences, provided the donor does not make any additional gifts to that beneficiary over a five-year period.

For more information or to schedule an appointment, call Fairfield County Financial Services at (203) 431-7530 or toll-free at 1-800-776-6518.

*Qualified expenses include tuition, room and board, books and other supplies needed for attendance at an institution of higher education. A 10% federally mandated penalty on the earnings withdrawn for non-qualified expenses will apply.

**Each state has different tax laws; therefore, you should check with your tax advisor to see if earnings are tax-free in your state, and if there is a state tax deduction or other benefit from choosing your home state's plan.

Investment and insurance products are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. Infinex and the Bank are not affiliated.  Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by a bank or bank affiliate.  These products are subject to investment risk, including the possible loss of value.

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