The CollegeAmerica difference
Like all 529 savings plans, CollegeAmerica is a tax-advantaged way to save for college tuition and expenses. Your 529 savings plan withdrawals will be free from federal tax as long as you use them for qualified education expenses like room and board, tuition, required books and supplies for higher education. You can also use your 529 plan to pay for K-12 tuition up to $10,000 per year per beneficiary. The cost of certain apprenticeship program expenses is another qualified education expense.
You can even use 529 plans to pay for certain student loan expenses, including the loans of a beneficiary's sibling, up to a $10,000 lifetime maximum. Additionally, new provisions introduced as part of the SECURE 2.0 Act of 2022 enable a beneficiary to roll over up to $35,000 over their lifetime from a 529 plan directly to a Roth IRA (individual retirement account) under certain circumstances without any taxes or penalties being assessed.§
As long as you use your 529 savings plan funds for qualified education expenses, you'll receive the tax advantages that come with these plans. Your tax treatment may vary, depending on the state you live in. 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.
The plan is sold through financial professionals, 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.
Flexible investment options
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.
Low fees
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.
Low minimum investment
You can open an account for as little as $250 (the minimum investment per fund), but subsequent contributions can be as small as $50.** 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!
Proven investment track record
Capital Group has a solid track record, with experienced managers, funds with a history of good results and diverse investment strategies. Learn more about how our investment professionals manage your money through The Capital SystemTM.
