529 College Savings Plans allow you to save for higher education for a named beneficiary and can offer significant tax advantages.

A 529 College Savings Plan Works For Almost Everyone

Parents, grandparents, siblings, uncles, aunts, or friends can establish 529 College Savings Plans. You can even set up a plan for yourself as long as the plan is designated for education funding needs.

Here's a general overview of the different options available. Please refer to your state's plan and any relevant offering documents for a complete description of the characteristics of the plan.

State 529 College Savings Plans

These plans, named after a section of the tax code that governs them and run by the states, let you save large amounts of money tax-free, usually in mutual funds.

There are no income restrictions to contribute and the plans maximize tax savings. With more than 80 plans now available, choosing the plan that right for you can be bewildering. A good first step: Check out your own state's plan, which may offer you a state tax deduction for your contributions.

Potential Downside:

• High fees
• Limited investment options
• You can typicaly adjust asset allocation only once a year or when you change beneficiaries

However, because these plans are typically held in the parents' name, they have a relatively small effect on financial aid.

529 Prepaid Plans

These plans let you buy future tuition at local public colleges at today's prices. However, payouts from these plans reduce aid eligibility dollar for dollar.

Independent 529 Plan

This new prepaid plan works like the state prepaid plans, but parents will be able to lock in tuition at a group of more than 220 private colleges at slightly discounted rates. Although one of the big risks is that your child will not attend one of the participating colleges, you can get your money back, adjusted slightly for fund performance. Parents can also roll over the money without penalty to another beneficiary or to either a state 529 savings or prepaid plan. Like state prepaid plans, distributions reduce your aid eligibility dollar for dollar.

Call us at 800-PNC-6111 to schedule an appointment to discuss your investment needs.