ScholarShare 529

Employers & Organizations

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ScholarShare 529 - A Great Way To Save

Chances are, your employees with children are saving for higher education, or trying to. There are lots of different ways to save from standard savings accounts to mutual funds.

For most of your employees ScholarShare 529 is better way to save. Here are a few reasons why

1
100% tax-free growth

Saving for college is already hard enough, so you want your employees to make the most of every dollar they set aside. With ScholarShare 529 your employees can benefit from 100% tax-free growth when the money is used for higher education expenses—and that can mean a lot more money to help pay for college. If the funds aren’t used for qualified education higher expenses, a 10% penalty tax on earnings (as well as federal and state income taxes) may apply.


2
It's financial aid friendly

An ordinary savings or investment account in a child’s name can reduce financial aid eligibility by as much as 20% of the balance each year.1

Employees who tap into retirement accounts to pay higher education expenses can see financial aid eligibility reduced by as much as 50% of the amount withdrawn.1

A ScholarShare 529 account has minimal impact on financial aid—reducing eligibility by no more than 5.64% of the account balance.1

As much as 20-50% versus 5.64%? That’s a big difference!


3
Contribution levels that fit any budget

Your employee has the freedom to determine their contribution amount up to $15,000/year.2


4
Enrollment year portfolios mean your employees don't need to be financially savvy

It’s not about choosing the “right” investment; it’s about choosing the investment that’s right for them. One popular option is the Enrollment Year Portfolio. It automatically shifts from aggressive-to-conservative investments as their child ages. It maximizes the opportunities of their investment horizon. And there is no need for them to manually rebalance their portfolio each year.


5
Low investment expenses

If you are helping your employees save for college, you want to make sure the options you are providing are an exceptional value in order to make the most of their savings.

ScholarShare 529 does just that, with investment expenses that are one half the national average for 529 plans, and one third the national average for broker sold 529 plans.3


6
It’s flexible, flexible, flexible

Your employees can...

  • Change beneficiaries if they want
  • Use the funds across the country or overseas at many types of institutions from universities to trade schools.
  • Fund a wide range of approved higher educational expenses – tuition, room, board, books and more
  • Maintain control over the assets even when the beneficiary turns 18 years old
  • Withdraw funds for other purposes (subject to tax and penalty)
  • Continue to participate in ScholarShare 529 even if they change jobs

What’s more, anyone can contribute (not just parents – aunts, uncles, grandparents even family friends).


7
Easy & Convenient

With ScholarShare 529 you can easily open an account in just 15 minutes and easily manage it online or by mail. By setting up recurring contributions from your bank account or by payroll direct deposit (if supported by your employer), making regular contributions is hassle free.


Sources:

  1. https://www.savingforcollege.com/articles/how-7-different-assets-can-affect-your-financial-aid-eligibility?. Note: IRA withdrawal is viewed as income impacting subsequent year’s aid. ScholarShare 529 figures assume parent is donor
  2. Considered an accelerated 5-year gift. One-year investment is treated the same as a 5-year period, free of federal gift tax, so long as no other contributions are made to the same beneficiary in that 5-year period. *Contributions are generally considered completed gifts for federal transfer tax purposes and are, therefore, potentially subject to federal gift tax. Generally, if a contributor’s contributions to Accounts for a Designated Beneficiary, together with all other gifts by the contributor to the Designated Beneficiary, do not exceed the “annual exclusion” amount of $15,000 per year (or $30,000 for a married couple), no federal gift tax will be imposed on the contributor for gifts to the Designated Beneficiary during that year.
  3. Strategic Insigiht 2019 529 Plan Industry Analysis, for 2039 academic year

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