TD Ameritrade 529 College Savings Plan
Plan OverviewPlan Benefits
The TD AMERITRADE 529 College Savings Plan is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer. The Nebraska State Treasurer is responsible for the overall administration of the Plan. The Nebraska Investment Council has the responsibility to invest funds deposited into the Plan. Union Bank & Trust Company serves as Program Manager.
Tax Advantages:
The TD AMERITRADE 529 College Savings Plan facilitates various tax advantages. Money in your account grows tax-deferred; all qualified withdrawals for higher education expenses remain Federal and Nebraska State tax-free. Also, money in a 529 plan is excluded from your taxable estate, making the TD AMERITRADE 529 College Savings Plan an excellent way to remove money from your estate while helping a loved one afford a college education.
Affordability:
The TD AMERITRADE 529 College Savings Plan is designed to meet the needs of virtually every family and every budget. No minimum annual contribution is required. You can contribute a maximum of $13,000 per year per beneficiary without incurring federal gift taxes. A 529 plan is the only way to contribute as much as $65,000 in one year without incurring federal gift taxes.1 The $65,000 contribution counts for the current year's $13,000 gift and for four future years' gift money. Couples who are married filing jointly can contribute up to $130,000 to each beneficiary in a single year. You can make these gifts to as many beneficiaries as you want all without gift tax. The Plan has a generous overall account balance limit of $360,000 per beneficiary.2
Contributing to the plan is simple and easy. You can deposit by check, through automatic account withdrawal, or through automatic payroll deduction (if your employer provides this service).
Flexibility:
Account flexibility is a key component of the TD AMERITRADE 529 College Savings Plan. Withdrawals from your account can be used at eligible schools nationwide. The TD AMERITRADE plan covers almost all expenses related to college including tuition, fees, reasonable room and board, books, equipment, and supplies. If a child decides not to attend college or does not use all of the funds, the account beneficiary can be changed to another member of the family.
The account owner may close the account or withdraw all or a portion of the funds at any time, even for non college-related expenses; however, any funds withdrawn for nonqualified expenses will be subject to the account owner’s income tax rate plus a 10% IRS penalty on the earnings portion of the withdrawal.
If the beneficiary receives a scholarship, the account owner may withdraw funds up to the amount of the scholarship without paying the 10% IRS penalty on the earnings portion of the withdrawal. The IRS penalty is also waived if the beneficiary passes away or becomes disabled.
Choices:
The diversified investment menu, and use of well-known mutual funds, is a unique advantage to the TD AMERITRADE plan. Because there are several investment options, you have the freedom to choose the plan that's right for you. Each option is designed to help you meet the increasing cost of higher education. For more detailed information, please refer to our Investment Options.
1 A donor may elect to treat a contribution to a beneficiary's account as made ratably over a five-year period. As a result a donor may make a contribution to a beneficiary's account of up to $65,000 (or up to twice that much if the donor and his or her spouse elect to “split” gifts) without any negative gift tax consequences, so long as the donor does not make any additional contributions to the account (or any other gifts to the account beneficiary) during that tax year or any of the succeeding four calendar years. A Federal Gift Tax Return (Form 709) is required to be filed. Please consult with your tax or legal professional. If the donor dies before the end of the five-year period, the portion of the contribution allocable to years after the donor's death will be includible in the donor's estate for Federal estate tax purposes.
2 You may not make additional contributions to a TD AMERITRADE 529 College Savings Plan account once the aggregate amount of contributions to the Nebraska Educational Savings Plan Trust for a beneficiary equals $360,000 or the value of all accounts in the Trust for the same beneficiary reaches $360,000.
Before investing in any mutual fund, carefully consider the investment objectives, risks, charges and expenses involved. A prospectus contains this and other important information. Please read it carefully before investing. E-mail us for a copy.
Investment Products: Not FDIC Insured. No Bank Guarantee. May Lose Value
Accounts in the TD AMERITRADE 529 College Savings Plan represent a separate class of Accounts in the College Savings Plan of Nebraska, which is a separate series of the Nebraska Educational Savings Plan Trust (the "Trust"). The Trust is designed to qualify as a tax-advantaged savings plan under the provision of Section 529 of the Internal Revenue Code and is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer, as Trustee. Union Bank & Trust Company acts as Program Manager of the TD AMERITRADE 529 College Savings Plan.
You should be aware that other states may sponsor their own qualified tuition plans and may offer a state tax deduction or other benefits that are limited to residents who invest in that plan. You should consult with a tax advisor about state and local taxes.
Withdrawals used to pay for qualified higher education-related expenses are free from federal and Nebraska state income tax. These expenses include tuition, fees, books, supplies and equipment required for enrollment at a qualified institution of higher education. Room and board is considered a qualified education-related expense if the student is enrolled on at least a half time basis.
Every individual's tax situation is different, and it is important to consult a qualified tax advisor regarding the application of the Plan's benefits to your own individual situation.
There is no guarantee that any investment portfolio will achieve its investment goals. The value of an account will go up or down based on the performance of the Portfolio in which the account is invested. When funds are withdrawn, they may have more or less value than the total contributions made to the account. Past investment performance is no guarantee of future results.
The investments in the TD AMERITRADE 529 College Savings Plan are not guaranteed or insured by the State of Nebraska , the Nebraska State Treasurer, Union Bank & Trust Company, TD AMERITRADE, the Federal Deposit Insurance Corporation, the Securities Investor Protection Corporation, or any other entity. Investors should read carefully and consider the investment objectives, risks, fees, and expenses contained in the Enrollment Handbook before investing.
For more information on the TD Ameritrade 529 College Savings Plan please email us at schulmerich@algxmail.com or contact us at 503.672.7750 or toll free 888.866.5639 for additional information.
Disclosure: Mutual fund investing involves risk and principal loss is possible.
