529 Plan: Charles Schwab: Schwab 529 Plan

Enjoy significant advantages with a Schwab 529 Plan

Advantages of a 529 Plan

Account earnings can grow tax-deferred.
Federal tax-free withdrawals when the money is used for qualified education expenses, such as tuition, fees, books, room and board.¹
Higher contribution amounts than other types of education savings accounts.
No gift tax incurred for contributions up to $65,000 ($130,000 per couple) for each beneficiary in a single year.²
Potential financial aid benefit—only 5.6% of the account’s value is considered parental assets for financial aid calculations.

Additional Advantages of the Schwab 529 Plan

Potential for growth and diversification with professionally managed portfolios based on Schwab’s asset allocation models.
A range of investment choices based on your investment objective, risk tolerance and time horizon.
Residents of any state can open a Schwab 529 Plan, which is sponsored by the state of Kansas.
Contribution limit of $300,000 per beneficiary.³
No account service or enrollment fees.

Minimum to open

$1,000
Waived if you establish an automatic contribution of at least $50 per month.⁴

Account service fee

$0 fee (effective 2008)

Portfolio fee

0.42-1.38%

Contribution limit

$300,000⁴

Schwab 529 Guide and Participation Agreeement

Schwab 529 Guide and Participation Agreement

1. The earnings portion of a non-qualified withdrawal is subject to federal and state income tax and a 10% penalty. State tax treatment of earnings may vary. Check with your tax advisor for rules on your state's tax treatment. The availability of tax or other benefits may be conditioned on meeting certain requirement such as residency, purpose for or timing of distribution, or other factors.
2. To qualify for the special gift tax exclusion, you need to file a gift tax return to treat the gift as if it were made in equal payments over five years. To avoid gift tax, you should make no additional gifts to the beneficiary during those five years.
3. Minimum to open an account for Kansas taxpayers is $250 or waived with automatic contributions of at least $25 per month.
4. The limit is reached when the total value of all accounts for one beneficiary reaches $300,000 through a combination of contributions and account appreciation.

Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plans can be found in the Schwab 529 Guide and Participation Agreement available from Charles Schwab & Co., Inc., and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with state tax and other benefits not available through this plan. As with any investment, it is possible to lose money by investing in this plan.

The Schwab 529 College Savings Plan is available through Charles Schwab & Co., Inc., and is managed by American Century Investment Management, Inc. The Plan was created by the Kansas State Legislature under the provisions of Section 529 of the Internal Revenue Code and is administered by Kansas State Treasurer Dennis McKinney. Notice: Accounts established under the Schwab 529 Plan and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer, American Century Investments or Charles Schwab & Co., Inc. Accounts established under the Schwab 529 Plan are domiciled at American Century Investments and not Schwab.

American Century Investments® receives remuneration from fund companies, including PIMCO Funds, American Beacon Funds, Metropolitan West Asset Management, and Baron Funds® for recordkeeping, shareholder services and other administrative services associated with funds held in the Schwab 529 Plan portfolios.

American Century Investment Services, Inc., Distributor and Underwriter.

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