HESAA Applauds Favorable Change for 529 College Savings Plans.TRENTON, N.J. -- The New Jersey Higher Education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. Student Assistance Authority (HESAA HESAA Higher Education Student Assistance Authority ) is committed to helping families save for college and is pleased with the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. changes that the Pension Protection Act of 2006 has instituted for 529 college savings plan investors. Among its many provisions, the Act has indefinitely extended federal income tax exemptions tax exemption, immunity from the requirement of paying taxes. Federal, state, and usually local law provide exemption from taxation for a wide variety of organizations, usually not-for-profit, such as churches, colleges, universities, health care providers, various for all qualified distributions from 529 college savings plans. Under previous law, qualified withdrawals after 2010 were to be subject to federal income tax at the beneficiary's rate. Tax benefits may be conditioned on meeting certain requirements. Federal tax, a 10% penalty and state tax apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Gift examples are general; individual financial circumstances and state laws vary -- consult a tax advisor A tax advisor is a financial expert especially trained in tax law. Some countries require tax advisors to verify the balance sheets of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in their taxable estate Taxable Estate The total value of a deceased person's assets that are subject to taxation - minus liabilities and minus the prescribed tax-deductible portion of assets left behind by the deceased. . See the Investor Handbook for more complete information. The permanent tax-free withdrawals make this an ideal time to give the gift of education with a 529 college savings plan. HESAA offers these college investing strategies nationwide, through the Franklin Templeton 529 College Savings Plan, and to New Jersey residents, with the NJBEST 529 College Savings Plan. Michael Angulo, executive director of HESAA stated, "Starting an NJBEST account for your child as soon as possible is a good way to invest for college costs. NJBEST is the only 529 College Savings Plan that offers a scholarship of up to $1,500 for New Jersey students who attend school in-state. The money you invest now can ease the cost of education later." With 529 plans, families with children of any age can save for college expenses through a variety of investment strategies that are designed to meet their specific needs. Through objective-based and aged-based portfolios, investors can structure their plan to suit their needs and risk tolerance Risk Tolerance The degree of uncertainty that an investor can handle in regards to a negative change in the value of their portfolio. Notes: An investor's risk tolerance varies according to age, income requirements, financial goals, etc. . Individual portfolios are available for investors who prefer to work with their financial advisor to customize an asset allocation Asset Allocation The process of dividing a portfolio among major asset categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio. mix that suits their specific college investing goals. 529 plans offer many tax and other financial advantages, including: tax-deferred growth, federal income tax-free qualified withdrawals, potential estate planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the features, ability to retain control over the money saved and the flexibility to designate oneself or any member of one's immediate family as the account beneficiary. Residents of New Jersey interested in the NJBEST 529 College Savings Plan may visit www.NJBEST.com. New Jersey Higher Education Student Assistance Authority's (HESAA) mission is to provide students and families with the financial and informational resources for students to pursue their education beyond high school. For more information about NJBEST and other education programs offered through the State of New Jersey, contact 1-800-792-8670 or visit hesaa.org. Investors should carefully consider plan investment goals, risks, charges and expenses before investing. To obtain an Investor Handbook, which contains this and other information, talk to your financial advisor or call Franklin Templeton Distributors, Inc., the manager and underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. for the plan, at 1-800/818-4030. You should read the Investor Handbook carefully before investing and consider whether your or the beneficiary's home state offers any state tax or other benefits that are available for investments only in its qualified tuition program. |
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