Invest Where Your Heart Is

College Savings Is a Gift from the Heart

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By Teresa Stewart - February 12, 2019

Investing in the people who matter most is a labor of love. That's especially true when you know it will impact someone's future. Turn a child's "When I grow up, I want to be…" dream into a possibility by giving the gift of college savings. It's easy to invest where your heart is with a 529 Plan.

College Savings Invests in Their Hearts

The gift of education invests in more than tuition, books or room and board. It invests in someone's heartfelt hopes and passions. As parents, grandparents, aunts, uncles or family friends, not many other gifts reap those intangible rewards. American Century Investments® sat down to chat with a grandmother as she explained why she gives the gift of education.

Investing for Financial Futures

Investing for college isn't just about the degree, either. With the high cost of education, every dollar you put away for college may mean carrying less debt at graduation. According to the 2018 statistics , the average college student graduates with $39,400 in student loan debt. That can be a major disrupter to when they can buy a first home, seek higher degrees, or even how long they'll have to work before retiring.

Giving this Heartfelt Gift Is Easy

The gift of education is easy with a 529 Plan because there are several ways to give. Choose the one that fits your situation and consider whether the child already has a 529 account.

1. Open a 529 account

Opening an account is easy with an online application . With our Learning Quest® 529 Education Savings Program  (video), you can start with any amount and set up regular contributions. Plus, anyone can open an account for a future student—that means friends and family members. You'll need the child's birth date, Social Security number and mailing address to enroll.

2. Contribute to an existing account

Many 529 Plans provide easy gifting features. Learning Quest® offers Ugift® , a free service that allows family and friends to contribute to a child's account electronically from their bank or by check.

3. Give and receive with an accelerated gift

Reduce your personal taxable estate through accelerated gifting. This unique 529 tax advantage allows you to make up to five years' worth of gifts to a Learning Quest account in a single year without being subject to gift taxes.

No additional gifts can be made to that beneficiary over the next four years after the year in which the one-time gift is made.

If the donor of an accelerated gift dies within the five-year period, a portion of the transferred amount will be included in the donor's estate for estate tax purposes. Consult with a tax advisor regarding your specific situation.

Whichever way you choose to give, the gift of education will be one that your child, grandchild, niece, nephew or family friend won't outgrow or soon forget.

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Teresa Stewart
Teresa Stewart

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      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

      IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

      This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

      The availability of tax or other state benefits (such as financial aid, scholarship funds and protection from creditors) may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.

      Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Handbook, available by contacting your financial advisor or American Century Investment Services, Inc., Distributor, at 1-800-579-2203, 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, withdrawal value may be more or less than your original investment.

      Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer or American Century Investments.

      Administered by Kansas State Treasurer Lynn Rogers
      Managed by American Century Investment Management, Inc.
      Distributed by American Century Investment Services, Inc.