What expenses and fees are generally associated with 529 plans?
Answer
Many 529 plans pass along their costs of administration to account owners through fees and other expenses. These fees vary from state to state. Typical charges include an enrollment or application fee when you set up most prepaid tuition contracts. State savings plans charge account owners for fund expenses and investment management fees imposed by the program's investment manager, as well as other fees. Charges by the investment manager are in the form of a pre-set percentage of your account's accumulated value. Many state savings plans also impose a flat account maintenance fee unless you maintain a substantial balance or make automatic payments to your account.
You may also be charged a fee for changing your 529 account's beneficiary, owner, or payment schedule. Keep in mind, however, that the program administrator can waive fees, particularly if you're a resident of the state running the plan.
Make sure you have a full understanding of the fees that apply to a 529 plan you're considering. Such charges could have a significant impact on your account's return. But the plan with the lowest fees is not necessarily the best. Weigh fees and expenses with other factors, such as investment history, program flexibility, and state tax issues.
GE 37713 (03/07)
If you are investing in a 529 plan outside of your state of residence, you may lose available state tax benefits. Make sure you understand your state tax laws to get the most from your plan.
529 plans are subject to enrollment, maintenance, administration/management fees and expenses. 529 plans are subject to fluctuation in value and market rise, including loss of principal.
Investors should consider the investment objectives, risks, charges, and expenses of 529 plans carefully before purchasing. More information about 529 plans can be found in the issuer's official statement. Please read the official statement carefully before investing.
AXA Equitable does not provide legal or tax advice.
Information provided has been prepared from sources and data we believe to be accurate, but we make no representation as to its accuracy or completeness. Data and information is provided for informational purposes only, and is not intended for solicitation or trading purposes. Forefield, Inc is not an affiliate of AXA Equitable. Please consult your tax and legal advisors regarding your individual situation. Neither AXA Equitable nor any of the data provided by AXA Equitable or its content providers, such as Forefield, shall be liable for any errors or delays in the content, or for the actions taken in reliance therein. By accessing the AXA Equitable website, a user agrees to abide by the terms and conditions of the site including not redistributing the information found therein.
© Copyright 2007 Forefield Inc. All rights reserved.
