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Education & College Savings Plans

Ways to Save for Education Expenses

Questions to Ask Yourself

Compare Common Ways to Save

For more detailed information about Coverdell Education Savings Accounts and/or 529 college savings plans, contact your Financial Advisor. He or she also can help determine which one is most suitable for your situation.

College Savings Comparison

Features	529 College Savings Plans	Coverdell Education Savings Account	Custodial Accounts (UGMA/UTMA)	Parent-Owned Taxable Brokerage Accounts
Income limitations for participation1	None	Single filers: $95,000- $110,000; joint filers: $190,000-$220,0001	None	None
Control of the account	Account owner	Custodian controls until beneficiary turns 30	Custodian controls until age of termination	Account owner
Annual contribution limits	$12,000 per beneficiary ($24,000 for a married couple)	$2,000 per designated beneficiary younger than 18	$12,000 ($24,000 for couple) without being subject to federal gift tax treatment	None
Current taxation of earnings	Earnings are tax-deferred until withdrawn.		If child is younger than 18, the kiddie tax applies. If age 18 or older, then taxed at child's rate.	Taxed at the owner's rate.
Qualified distributions are federal-tax-free	Yes2	Yes	N/A	N/A
May have state tax benefits	Yes	Yes	No	No
Taxation/penalty for withdrawals for nonqualified expenses	Earnings portion of nonqualified withdrawals is taxed as ordinary income to the plan participant and is subject to a federally mandated 10% penalty (earnings only). Penalty-free withdrawals are permitted in the event of scholarship or death or disability of the beneficiary.		N/A	N/A
Investment alternatives	A choice of portfolios managed by professional fund managers	Owner chooses investments
Can be used for college expenses	Yes	Yes	Yes	Yes
Can be used for primary and secondary school expenses	No	Yes	Yes	Yes
Can change beneficiaries	Yes	Yes	No	No

A.G. Edwards does not provide legal, accounting or tax-preparation advice.
You should consult your tax and legal advisors for your specific situation.

Note: An investment in a 529 college savings plan will fluctuate such that an investor's shares when redeemed may be worth more or less than the original investment. There is no guarantee that an account will grow enough to cover higher education expenses. All 529 college savings plans have various fees and expenses. Before investing in a 529 college savings plan, be sure to read the plan's offering document carefully for more information on fees, charges and expenses.

You should consider a 529 college savings plan's investment objectives, risks, charges and expenses carefully before investing. The plan's official statement, which contains this and other important information, should be read carefully before investing.