Investments and Control
Features 529 Plans UGMA/UTMA Coverdell Education Savings Taxable Account In Parent’s Name
Qualifications For Use Qualified expenses at eligible institution providing post high school instruction. Includes vocational, technical, community college, plus two and four-year colleges. Owner must use for benefit of minor, if used before minor reaches legal age; after child becomes of legal age, no restriction on use of assets. Qualified expenses for K-12 plus any postsecondary school; must be used before beneficiary turns 30 (Age requirement not applicable for special needs beneficiary.) None
Who Is Owner Account owner Student Student Account owner
Who Controls Account owner Control transfers to child when child becomes of legal age. Account owner Account owner
Investment Options Defined by each state’s plan. Broad range of securities and other investments. Broad range of securities and other investments. Broad range of securities and other investments.
Investment Style Professionally managed; changes are limited. Can be self directed; changes are not limited. Can be self directed; changes are not limited. Can be self directed
Change Beneficiary Yes, may change anytime to a member of family of original beneficiary without penalty No Yes, may change anytime. Not applicable
Max Contribution Established by each state. Max. ranges from $235,000 to $341,000. Lifetime limit adjusted periodically for inflation. Unlimited $2k annually beginning 2002 Unlimited
Financial Aid and Taxation
Features 529 Plans UGMA/UTMA Coverdell Education Savings Taxable Account In Parent’s Name
Tax Earnings Federal tax-free. State tax advantages may vary by state. Up to $1,500 is generally tax-free for Federal and state tax purposes. Remaining income may be taxed at parents’ rate. Federal tax-free. State tax advantages may vary by state. Taxable to owner
Federal Tax Deduction No No No No
State Tax Deduction Yes, for some states. No No No
Withdrawl Penalty Earnings are subject to 10% penalty if not used for qualified expenses. Not applicable Earnings are subject to 10% penalty if not used for qualified expenses. Not applicable
Income Limitations None None Max allowed contributions phased out as AGI exceeds thresholds.(Single $95k-$110k, Joint $190K-$220K). None
Gift Tax Guidlines January 1, 2007 - gift limit of $60k per beneficiary ($120k with gift splitting) can be contributed without incurring gift tax. January 1, 2007 - subject to normal gift tax exclusion of $12k per beneficiary, per year ($24k with gift splitting). January 1, 2007 - subject to normal gift tax exclusion of $12k per beneficiary, per year ($24k with gift splitting). Assets part of owner’s estate.
Estate Tax Guidlines Account balance is generally not included in the estate of the contributor or the estate of the minor. (A portion can be included if the contributor dies in the 5-year averaging period.) Value included in minor’s estate. Balance of account not included in estate. Usually, neither contributor nor beneficiary includes account in estate. Assets part of owner’s estate.
Impact Federal Financial Aid (EFC Calculation) After July 1, 2006 dependent student owned plans are not considered. Included as student’s asset and has a significant negative impact (35%). No impact if invested asset is a 529 plan. After July 1, 2006 dependent student owned plans are not considered. Included as parent’s assets and has a slight negative impact (0%-5.5%).
Tax Year Current for tax year 2007 Current for tax year 2007 Current for tax year 2007 Current for tax year 2007

 

 

Privacy | Security
This credit union is federally insured by the National Credit Union Administration.
 
Nondeposit products offered through Navy Federal Brokerage Services, LLC (NFBS), member FINRA/SIPC. Insurance products sold through licensed agents appointed with various companies. Investment advisory services offered through Navy Federal Asset Management, LLC (NFAM). NFBS and NFAM operate under the marketing name of Navy Federal Investments & Insurance. Nondeposit investment products are not federally insured, are not obligations of the credit union, are not guaranteed by the credit union or any affiliated entity, and involve investment risks, including loss of principal, and may be offered by an employee who serves both functions of accepting members' deposits and the selling of nondeposit investment products. NFBS and NFAM products are not offered, recommended, sanctioned or encouraged by the Federal Government. Office of Supervisory Jurisdiction, 12851 Worldgate Drive, Herndon, VA 20170; phone 1-877-221-8108; fax 703-332-0424.
 
Investors should carefully consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing. This and other information about municipal fund securities is available in the issuer's official statement which can be obtained directly from the issuer, or if distributed through a broker dealer, may be obtained from a financial adviser, and should be read carefully before investing.
 
An investor should consider, before investing, whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.
 
If a municipal fund security describes one or more of their investment options as having the characteristics of a money market fund, it is important to know that an investment in the security is not insured or guaranteed by the FDIC or any other government agency (unless such guarantee is specifically provided by or on behalf of such issuer) and, if the security is held out as maintaining a stable net asset value, that although the issuer seeks to preserve the value of the investment at $1.00 per share or such other applicable fixed share price, it is possible to lose money by investing in the security.

© Copyright All rights reserved
Privacy Policy About Browsers