Wells Fargo Funds Management is proud to have been selected by the state of Wisconsin to offer its 529 college savings plans. For more information about tomorrow's scholar
®, please visit the financial professional sections of
www.tomorrowsscholar.com or click on the logo to the left.
Investing in Your Child's Future Today
Investing for education is one of the primary financial goals of investors today. Today, according to the U.S. Department of Education, more than half of all recent high school graduates in the United States pursue some type of postsecondary education.
According to the College Board, with the cost of higher education outpacing inflation since the 1980s, the percentage of family income required to pay for college has increased significantly.
Recognizing the increasing need to start planning for college early, a growing number of families are taking advantage of 529 college savings plans to help finance the future qualified higher education expenses of their children or grandchildren.
Benefits of Investing in a 529 Plan
Tax Advantages
Earnings from 529 college savings plans are federal and potentially state tax-free for qualified withdrawals.
Flexibility
Anyone of legal age may open an account. In addition, people of all income levels
can contribute to a 529 account. Financial withdrawals can be used for any qualified
higher education expenses – tuition, room and board, books and other expenses
– at any eligible school across the U.S. (and even some abroad).
Generous Contribution Options
529 plans allow contributions as high as $250,000 or more for each beneficiary. Up to $65,000 may be contributed as a lump sum and excluded from federal gift tax, pro-rata over a five-year period.1 Contributors do not have to be a parent, grandparent or even a relative. In fact, it is even possible for an adult to contribute to his or her own 529 plan.
Financial Aid
The formulas used to determine financial aid do not count 529 plan assets within the student's asset base. Additionally, since the account owner retains the assets, plans established by grandparents, for example, do not appear within the parental asset base on the FAFSA (Free Application for Federal Student Aid).
Estate Planning
Contributors can aggregate five years of the allowable $13,000 annual gift-tax
exclusion into a 529 plan. This allows wealthy grandparents to move money into
a tax-deferred investment through large one-time gifts.
Control
The person who establishes the account (the owner) retains control of how the assets are spent, not the beneficiary. The beneficiary can be anyone – a child, grandchild, niece, nephew, a friend or even the contributor. If the child decides not to attend college, funds in the account can be transferred to another family member. Generally, the account owner can change the investment option on the plan once every calendar year or whenever he or she changes the beneficiary on the account. However, for calendar year 2009, an account owner may change investment direction twice without a change in designated beneficiary. In addition, the owner may also choose a successor owner.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.
For Section 529 plans, an investor's or a designated beneficiary's home state may offer state tax or other benefits that are only available for investments in that state's qualified tuition program. Please consider this before investing.
This Web Site is accompanied by a current program description for tomorrow's scholar. Consider the investment objectives, risks, charges and expenses of the investment carefully before investing. This and other information about tomorrow's scholar can be found in a current program description. Please read it carefully before investing.
