Where do I begin?
You’re proud of your grandchildren. And you want to reward them with the best gift of all: education. Fortunately, you know there's no time like the present to start saving for the future. Kudos to you, grandparents.
You’re proud of your grandchildren. And you want to reward them with the best gift of all: education. Fortunately, you know there's no time like the present to start saving for the future. Kudos to you, grandparents.
Saving for education is like planning a big trip — getting to your destination takes a good plan. A 529 savings plan is a popular way to save for college.
A CollegeAmerica 529 savings plan makes it easy.
Use a 529 savings plan for more than college tuition, including housing, required books and computer equipment.
The earnings from your 529 savings plan investments are exempt from federal taxes, and in many cases, there is a state tax benefit as well. Tax-advantaged treatment applies to savings used for qualified education expenses. State tax treatment varies.
You can transfer a 529 savings plan to a qualified family member of the original beneficiary.
Wondering how to save for your grandchild’s education? Get answers about opening an account, making contributions and withdrawals, updating your beneficiaries and more.
How does a 529 savings plan account affect my taxes?
There’s no federal tax break for contributions. Some states offer their residents a tax break for contributions. Earnings in a 529 savings plan are free from federal income tax if withdrawals are used to pay for qualified education expenses. Otherwise, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax. States take different approaches to the income tax treatment of withdrawals. For example, withdrawals for K-12 expenses may not be exempt from state tax in certain states. You can contribute up to $17,000 ($34,000 for married couples) annually without gift tax consequences. Under a special election, you can contribute up to $85,000 ($170,000 for a married couple) at one time, accelerating five years' worth of contributions.
Who can establish a 529 savings plan account?
Any adult who is a U.S. citizen or legal resident can open a 529 savings plan. Only the account owner can make decisions affecting the account — like choosing the investments, taking withdrawals or changing the beneficiary. In addition, U.S. trusts, corporations, partnerships, nonprofit organizations and other entities may open an account.
How do I contribute to the account?
Once you’ve opened the account, you can set up an automatic investment plan, or contribute additional money online or by check anytime.
choose
You trust your doctor with your health and your mechanic with your car. You shouldn’t settle for anything less when you’re deciding where to invest your money.
Trusted by more than 1 million families nationwide, CollegeAmerica is the country’s largest 529 savings plan *, with more than $92.7 billion invested.†
A 529 CollegeAmerica savings plan is only one type of investment Capital Group offers. For a complete investment strategy for your growing family we recommend choosing a financial professional to work. with via our Financial professional locator. Ready to open a new account? Review the CollegeAmerica program description and download the application below.
* Largest by assets, according to the 4Q 2021 College Savings Quarterly Data Update from ISS Market Intelligence.
† As of December 31, 2021, CollegeAmerica AUM is $92.7B.
‡ Number of accounts as of December 31, 2021.
** 529 College Savings Quarterly Fee Analysis, ISS Market Intelligence, Fourth Quarter 2021. CollegeAmerica's fees were in the top quartile of 31 national advisor-sold 529 plans and the top quartile of 26 national fee-based, advisor-sold 529 plans based on the average annual asset-based fees.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. Similar information is contained in the CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors, Inc. and sold through unaffiliated intermediaries.
Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits, such as financial aid, scholarship funds and protection from creditors, not available through CollegeAmerica. Before investing in any state's 529 plan, investors should consult a tax advisor. CollegeAmerica is a nationwide plan sponsored by Virginia529.
This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
Use of this website is intended for U.S. residents only.
American Funds Distributors, Inc.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.