529 Plan and College Savings

Posts Tagged ‘coverdell’

Question: Coverdell vs 529?

We have a three year oldwe would like to save college money for. I know that you can use Coverdell money from elementry-HS and can only use 529 for college…are there any other major differences? Is there a monthly charge for these accounts? Does anyone know where I can find information on Wisconsin plans? If another state has a better plan, can you put money in that plan instead of your own states?

Answer: #1 difference, like you said… Coverdell K-12 + college, 529 college only. Coverdell has $2000 annual contribution limit, 529 has no limit (well can’t contribute when total value reaches $273K). Can’t contribute to a Coverdell after age 18, must remove all money by age 30. Not true for 529. Fees are specific to the company’s plan (Coverdell and 529 are just sets of IRS tax rules, the underlying plan controls the fees, expenses, etc) 529s are also usually eligible for a state tax deduction if you enroll in your state-sponsored plan, but you still can enroll elsewhere, just wont get the tax break.

EdVest College Savings Program (Wisconsin)
EdVest is Wisconsin’s section 529 college savings plan and section 529 prepaid tuition program. There is a cumulative contribution limit of $246,000 per beneficiary. Qualified withdrawals are exempt from Federal and Wisconsin state income tax and contributions (up to $3,000 per year per beneficiary) are deductible for Wisconsin income tax purposes. Investment options include aged-based portfolios, an S&P 500 index fund, a bond fund portfolio, blended portfolios (ranging from aggressive to conservative), and a tuition unit option. The tuition unit option is priced to cover the estimated cost of tuition and fees at public or private Wisconsin colleges, and are invested in government and corporate bonds. The program is managed by Strong Capital Management, Inc. and is also available through American Express Financial Advisors as the Tomorrow’s Scholar College Savings Plan. For more information, contact:
EdVest
PO Box 3152
Milwaukee, WI 53201-3152
Phone: 1-888-EDVESTWI (1-888-338-3789) or 1-866-677-6933 (Tomorrow’s Scholar)
URL: www.edvest.com or www.tomorrowsscholar.com