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529 College Savings Plan
Anyone interested in saving for a child’s college education can benefit from investing in a 529 College Savings Plan. Created by Congress to help families afford rising college costs, the earnings grow federal income tax-free, and qualifying withdrawals may also be free from federal income tax. Modern Woodmen investors can choose between several 529 College Savings Plans.


Tax-deferred growth
Earnings on 529 College Savings Plan investments grow federally income tax deferred, so funds accumulate more rapidly than they would in a fully taxable account.

Tax-free distributions
Qualified distributions are free from federal income tax.  Qualifying expenses include tuition at most accredited colleges and universities (and some technical and vocational schools), educational supplies, room and board (for those enrolled at least half-time), and other expenses.

Wide range of contributions
Most 529 College Savings Plans allow for a wide range of contributions, from as low as $25 per month to as much as $250,000 or more.  Additionally, investors can contribute up to $65,000 per beneficiary ($130,000 for married couples) in a single year without triggering federal gift taxes. (However, they cannot contribute again for five years if they choose to do that.)

Control of your account
With a 529 College Savings Plan, you control your investments and retain the option of changing the plan beneficiary, pursuant to plan-specific rules.  In addition, all contributions are excluded from the donor's taxable estate, subject to look-back rules, and there are no income limits that exclude taxpayers with large incomes from making contributions.

Professional investment management
Mutual funds have become the predominant investment vehicle for 529 College Savings Plans, combining professional investment management with excellent diversification and investment choice.  Many plans also offer age-based portfolios, which seek to invest assets in pre-determined allocations deemed appropriate for beneficiaries in certain age groups.  As beneficiaries grow older, the asset mix becomes more conservative, meaning they have a greater chance of protecting contributed funds.  Static portfolios are also available, in which investors are given a choice of predetermined portfolio allocation models ranging from conservative to aggressive.

Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America, 1701 1st Avenue, Rock Island, IL 61201, 309-558-3100. Member: FINRA, SIPC. Products are available in most states. Individual representatives may not be licensed to sell all products.

529 College Savings Plan earnings grow tax deferred, and withdrawals for qualifying higher education expenses are free from federal income tax. If the distributions are non-qualifying, the earnings portion may be subject to income tax and a 10 percent penalty. Consult your tax advisor.

Diversification does not assure a profit and is not a guarantee against loss.

Consider the investment objectives, risks, and charges and expenses of the 529 Plan carefully before investing. Investments in 529 Plans are subject to market risks, including the potential loss of principal. For this and other information about the investment company, obtain a prospectus from your Modern Woodmen representative.

Read it carefully before you invest or pay money. 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 529 college savings plan.

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