One of 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 a 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. 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.
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.
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 diverse investment strategies. Learn more about how our investment professionals manage your money through The Capital SystemSM.
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 4Q 2020 529 College Savings Quarterly Data Update from ISS Market Intelligence. As of December 31, 2020, CollegeAmerica AUM is $81.9B.
† Source: Morningstar. Ratings are based on the following criteria: process, people, parent, price and, until 2020, performance. In 2020, Morningstar's performance analysis took place as part of a broader assessment of the people, process and parent criteria.
‡ 529 College Savings Quarterly Fee Analysis, ISS Market Intelligence, 4Q 2020. CollegeAmerica’s fees were in the top third of 31 national advisor-sold 529 plans and the top quartile of 24 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, 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 a nationwide plan sponsored by Virginia529℠.
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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.
