529 Plans
A tax-advantaged college savings plan

Saving for future college expenses is a priority of the highest order for many parents. 529 Plans are a simple, highly effective way for families to prepay tuition or save money for education expenses in a tax-deferred account.

Named after its IRS code, the 529 Plan is a flexible investment program implemented through a state-sponsored asset management entity. Cash contributions can be made by anyone, but amounts are limited to $11,000 a year and capped at $55,000.

Anyone who plans to attend a post-secondary institution can be the beneficiary of a 529 Plan. Individuals can even set up a plan for their own future educational needs.

Although 529 contributions are not pre-tax, all earnings are exempt from federal tax upon withdrawal. If the beneficiary does not use the money for education expenses, the account owner can move the assets elsewhere, subject to some taxes and a penalty on earnings.

For more information, contact an Extraco Relationship Manager by e-mail, or call 866-EXTRACO toll-free.

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