One of the the most effective ways to save for college is with a 529 savings plan. CollegeAmerica is the nation’s largest 529 savings plan,* with more than 1 million families invested. As a matter of fact, since 2004, CollegeAmerica has consistently been recognized as among America’s best by Morningstar, a premiere investment research company.†
Like all 529 savings plans, CollegeAmerica is a tax-advantaged way to save for college tuition and expenses, as well as K-12 private school tuition (up to $10,000 per year). Additionally, for distributions made after December 31, 2018, qualified education expenses include expenses for fees, books, supplies and equipment required for the participation of a designated beneficiary in certain apprenticeship programs. Tax-advantaged treatment applies to savings used for qualified education expenses. If withdrawals are used for purposes other than qualified education expenses, 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. State tax treatment varies.
The plan is sold through financial advisors, so you always have someone to help you strategize for college savings. The underlying investments are managed by Capital Group, home of American Funds, which has been helping investors since 1931.
See why CollegeAmerica earns its reputation as one of America’s best education savings plans.
You decide how to invest your savings. You can select a target date fund, which automatically adjusts based upon the date you plan to use the funds. You may opt for a pre-built portfolio based upon a common goal. Or you can create a custom portfolio of individual mutual funds.
CollegeAmerica’s fees are among the lowest for advisor-sold 529 college saving plans.‡ So you can keep any tax-free growth your investment earns.
You can open a CollegeAmerica 529 savings plan with as little as $250. Imagine investing that amount when your child is a baby and contributing $50 monthly for the next 18 years. By the time your child is ready for college, you could be well on your way!
Capital Group has a solid track record, with experienced managers, funds with a history of good results and sensible investment strategies. Learn more about how our investment professionals manage your money and The Capital Advantage.®
In order to open a CollegeAmerica 529 savings plan, you’ll need to speak to a financial professional. Working with a professional is a good idea for all your financial needs, not only college savings. You can use our locator to find a financial professional.
* Largest by assets, according to the 1Q 2020 529 College Savings Quarterly Data Update from ISS Market Intelligence. As of March 31, 2020, CollegeAmerica AUM is $66.4B.
† “Rating the Top 529 College Savings Plans,” October 22, 2019. morningstar.com. Among the criteria Morningstar assessed were fees, flexibility of investment options and a solid manager selection process.
‡ 529 College Savings Quarterly Fee Analysis, ISS Market Intelligence, 4Q 2019. CollegeAmerica’s fees were in the top quartile of 30 and 18 plans based on the average annual asset-based fees for national advisor-sold and fee-based advisor-sold 529 plans, respectively.
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, summary prospectuses and 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 sponsored by Virginia529℠.
Investments in mortgage-related securities involve additional risks, such as prepayment risk.
Diversification does not eliminate the risks of investing; losses are possible in diversified portfolios.
Each target date portfolio is composed of a mix of underlying funds and is subject to the risks and returns of those funds. Underlying funds may be added or removed during the year. Investment professionals gradually adjust the portfolio over time so that it becomes more preservation-oriented. The allocation strategy does not guarantee that investors' education savings goals will be met. The target date is the year that corresponds roughly to the year in which the beneficiary is expected to begin taking withdrawals. Investors and their financial professionals should periodically evaluate their investment to determine whether it continues to meet their needs.
Fund shares of U.S. Government Securities Fund are not guaranteed by the U.S. government.
Allocations may not achieve investment objectives. The portfolios' risks are directly related to the risks of the underlying funds.
Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds.
The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.
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., member FINRA.
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.
