What is it?
A 529 plan is a state-sponsored tuition program that offers attractive tax benefits while allowing you to make sizable contributions. The funds may generally be used for any qualified higher education expense, including tuition, room, board, fees, books, supplies and equipment. Tax benefits may be conditional upon meeting certain requirements.
Who needs it?
Most parents who find themselves intimidated by the ever-rising price of higher education may find that a 529 plan can be a key component of their education funding.
What is covered?
Plans generally come in two forms: prepaid tuition plans and college savings plans. Prepaid tuition plans allow participants to "lock in" tuition rates at eligible state colleges or universities with a lump-sum investment or monthly installment payments. College savings plan funds allow you to invest your money in an account for the purpose of paying the beneficiary’s higher education expenses. Withdrawals can generally be used to pay for qualified expenses at any accredited institution of higher education nationwide, and some abroad. Details and contribution limits of plans vary by state.
Investments in 529 college savings plans are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
Before investing in any plan, investors should carefully consider investment objectives, risks, charges and expenses. Plan disclosure documents contain this and other information about the plans, and may be obtained by asking your financial advisor, by visiting our Web site at www.oppenheimerfunds.com or by calling 1.800.525.7048. Read these documents carefully before investing.
Some states offer favorable tax treatment to their residents only if they invest in the state's own plan. You should consult your tax advisor.
