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Saving for Education

A Brief History

For several decades, American families have acknowledged both the value of an education and the escalating price of college tuition. Education is integral to the success of our children and grandchildren, and while paying for college could be one of the largest expenditures you will incur, it just might be the best investment you ever make. That is why it is important to start saving early, and a 529 plan is a great savings option to help you achieve your college savings goals.

Named after the section of the Internal Revenue Code that created them, 529 plans are designed specifically to save for college, offering various tax benefits and other important features such as estate planning and gifting benefits. It's important to remember that these and other benefits may be conditioned on meeting certain requirements.

1980

Early pre-paid tuition plans set up by a few states

1996

Congress enacts "Section 529" of IRS Code

1997

Tax Relief Act passed – Education IRA (Coverdell Education Savings Account) established

2001

Tax Relief Act passed – withdrawals made tax-free (with "Sunset" or expiring 2010 provision)

2006

Tax-free withdrawals made permanent

IMPORTANT RISK DISCLOSURES

Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.

Foreign & Emerging Markets: Investing in foreign securities, especially in emerging markets, subjects the portfolio to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk.

Credit & Interest: Debt instruments are subject to various risks, including credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt instruments may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

Income: Income received from the portfolio may vary widely over the short- and long-term and/or be less than anticipated if the proceeds from maturing securities in the portfolio are reinvested in lower-yielding securities.

Market Volatility: The value of the securities in the portfolio may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the portfolio, including hampering the ability of the portfolio's manager(s) to invest its assets as intended.

NOTICE: CollegeAccess 529 Plan accounts are not insured by any state, and neither the principal deposited nor any investment return is guaranteed by any state. Furthermore, the accounts are not insured, nor the principal or any investment return guaranteed, by the federal government or any federal agency.

Before investing, an individual should consider whether their state of residency — or their intended designated beneficiary's state of residency — offers any benefit, such as state tax deduction, financial aid, scholarship funds, and protection from creditors or any other benefits that are only available for investments in that state's 529 savings program.

An investor should consider the investment objectives, risks, and charges and expenses of the CollegeAccess 529 Plan before investing. This and other important information is in the Plan Disclosure Statement (SD Investors Version ), which should be read carefully before investing, and which is available on this website.

The Program Manager and Underwriter for the CollegeAccess 529 Plan is VP Distributors LLC, One Financial Plaza, Hartford, CT 06103,
1-800-243-4361. The Plan is issued by the South Dakota Higher Education Savings Trust. Certain of the investment management firms that manage underlying mutual Funds in the Program, including Virtus Investment Advisers, Inc. (VIA), are affiliated with the Program Manager, VP Distributors, LLC.  Virtus Fund Advisers, LLC is an affiliate of VIA and the Program Manager.

Withdrawals from a 529 Plan for qualified expenses are free from federal income tax. Qualified expenses include tuition and fees, room and board, books and other supplies.

State taxes may apply for residents of states other than South Dakota. Speak to your tax or financial advisor.

Non-qualified withdrawals are subject to federal income tax and a 10% penalty tax on earnings, with some exceptions, and may also be subject to state tax.

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