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Tax Advantaged College Savings Plans
Before you know it, your children or grandchildren will be ready for
college—and the cost of education keeps getting higher and higher. “Families
need help saving for college now more than ever before,” said State
Treasurer David Heineman. “The future arrives every morning and Nebraska
must begin providing parents an easy, tax advantaged means to save for
their children’s college education. A college graduate will earn nearly
twice as much during his lifetime as his high school graduate counter-part.”
The College Savings Plan of Nebraska is a new plan that makes saving
for college simple and affordable. Parents, grandparents, or anyone
interested in helping secure a child’s dream of a higher education can
now open an account. The plan offers tax-savings advantages, applies
to schools nationwide, and provides a variety of investment options.
Planning For Your Child’s Future
Tax Advantages. Participating in the
program qualifies you for a Nebraska income tax deduction of up to $1,000
for contributions to the plan. Earnings grow tax-deferred—and qualified
withdrawals are exempt from Nebraska State tax and federally taxed at
the child’s rate.
Affordability. You can begin investing
with as little as $25 a month or $300 per year. Contributions may be
made for as much as $50,000† per year without triggering federal gift
taxes. Contributions. You may contribute to your account in several
ways: by check, automatic deduction from your checking or savings account,
or payroll deduction (check with your employer for availability).
Flexibility. If your child decides not
to attend college, the beneficiary may be changed to another family
member.
Options. Your money is invested in brand-name
funds you know and trust, including Vanguard, Fidelity, Janus, American
Century, and PIMCO. † $50,000 counts as 5 years of gift money. You
also have the option of giving up to $10,000 per calendar year.
The comparison chart on the next page demonstrates the many benefits
of the college savings plan.
How The Plan Works
The College Savings Plan allows you to use your investments at schools
nationwide—including private or public colleges, universities, community
colleges, occupational schools, trade schools, and graduate programs.
Qualified expenses include tuition and fees—as well as books, supplies,
room and board, and other educational expenses. With no residency requirements
or income restrictions, anyone is eligible to open an account.
After completing a national competitive bid
process, the Nebraska State Treasurer selected Union Bank to administer
the plan. State Treasurer David Heineman said, “I truly believe that
Union Bank and my office will have one of the fastest growing college
savings plans nationwide. I have worked with Union Bank during the last
few months to ensure that our Nebraska College Savings Plan is one of
the lowest cost plans in the nation. Additionally, Nebraska’s plan is
one of only fourteen states that provides for a state income tax deduction
and our plan covers a broad range of qualified college expenses.”
Growing Your Investments.
It’s never too early to start planning for your child’s future. Investing
early ensures your money will have time to grow. When you open a College
Savings Plan account, you have a wide variety of investment choices—including
four age-based portfolios and seven target portfolios.
For more information about the College Savings
Plan of Nebraska or to receive an enrollment kit, contact us toll-free
at 1-888-993-3746, visit www.PlanForCollegeNow.com,
or e-mail collegesavings@ubt.com.
*Investment
services offered through Union Bank & Trust Company’s Trust Division.
Investment products: Not FDIC Insured - No Bank Guarantee - May Lose
Value.
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