529 Plan Basics [Infographic]

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Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans prior to investing.  This and other important information is contained in the fund prospectuses, summary prospectuses and each issuer’s official statement, which can be obtained from a financial professional and should be read carefully before investing.

There is a risk that the investments may not perform well enough to cover the cost of college as anticipated.  Investors should also consider whether their state offers any favorable state tax benefits for 529 plans, and whether such benefits are contingent upon use of the in-state 529 plan.  Other state benefits may include financial aid, scholarship funds and protection from creditors.

For withdrawals not used for qualified education expenses, earnings may be subject to taxation as ordinary income and a 10% federal income tax penalty.