The Future Scholar 529 Plan

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With a 529 plan, parents, relatives and friends can help fund a significant portion of a loved one's future college expenses and at the same time enjoy many added benefits as a 529 plan account owner. A knowledgeable advisor who understands how these benefits work can help maximize the power of a 529 plan.

Future Scholar 529 Plan can provide you with the knowledge and resources you need to tailor an education funding plan to each family’s needs and develop rewarding and lasting, multi-generational relationships.

Advantages for account owners

  • Ability to remove assets from a taxable estate. Annual gift tax exclusion amounts per beneficiary for 2024: $18,000/individual and $36,000/married couples.

  • Five-year accelerated gifting option allows up to five times the annual amount to be gifted in a single year without gift tax consequences. Five-year forward gifting amounts: $90,000/individual and $180,000/married couples for 2024.

  • Maintain complete control of the account (including ability to revoke gifts), even though contributions are considered completed gifts and are generally excluded from the account owner’s taxable estate.

  • Grow account free of federal taxes (and in many states, also state income tax free).

  • "Max fund" a 529 plan. With many 529 plans allowing balances over $500,000, account owners may consider giving above their annual gifting amount to "max fund" a plan up to the maximum account balance and remove more assets from their taxable estate. This involves using some of your lifetime gift/estate tax exclusion, currently $13.61 million for 2024.

  • Possibly avoid additional taxes

    • A 3.8% net investment income tax is imposed on certain unearned (investment) income of high-income individuals, estates and trusts

    • Contributing to a 529 plan could help high-net-worth investors mitigate or avoid this tax

    • Growth in a 529, as well as distributions, are not subject to the 3.8% tax

    • A new provision of SECURE 2.0 allows rollover "leftover" assets to a Roth IRA for the beneficiary subject to certain conditions.

Prepare your clients for future college costs

Saving for college may seem overwhelming, but the sooner your clients start planning the better off they will be. Columbia Threadneedle Investments offers a variety of tools you can use with clients to help estimate their personal circumstances.

  • Our College Savings Projector calculator can provide a personalized, realistic estimate of what college will cost and what it will take to save for it.
  • The Student Aid Index (SAI) calculator can provide an estimate of how much a family may be expected to contribute out-of-pocket when it comes time to pay for college.

Call your Columbia Threadneedle Investments representative to take advantage of our education funding resources.

Offering all of the benefits provided by the Internal Revenue Code Section 529, plus:

  • A multi-managed investment lineup with leading money managers View options

  • 25-single fund options and seven asset allocation portfolios

  • Strategic and tactical management of asset allocation portfolios

  • Age-based risk tracks, which take into consideration a family's risk tolerance in addition to their child's age

Advisor resources