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Why Scholars Choice
As a financial professional, we realize you have many choices when it comes to your 529 plan savings business. Scholars Choice is one of the largest financial professional-sold 529 plans. Here are three reasons why financial professionals choose us:
- Distinctive experience - With Scholars Choice, you and your clients access the capabilities of two world-class financial organizations, TIAA and Nuveen. TIAA1 is a pioneer in the 529 industry that brings deep knowledge and demonstrated experience in managing every aspect of a successful 529 program. Nuveen, investment manager of TIAA, offers capabilities that span public and private markets, over five decades of leadership in responsible investing and a 120-year history of helping clients meet their financial goals.
- Active/passive blend - The Plan has a dedicated team of investment professionals focused solely on managing 529 plans. The team leverages top-tier managers and highly-rated funds to take advantage of investment opportunities wherever they exist—across asset classes and market sectors. For this reason, the majority of portfolios have a smart blend of active and passive underlying funds, seeking to deliver benchmark-beating performance while maintaining competitive fees.
- Estate planning benefits - Scholars Choice offers several tax advantages to your clients – particularly when it comes to estate planning. Contributions to 529 plans are considered completed gifts, which means current assets and future earnings are excluded from their taxable estate for federal estate tax purposes.
You probably know that they can contribute up to an annual limit of $15,000 ($30,000 for joint filers), free from federal gift taxes. But did you know about the accelerated gifting benefit -- unique to 529 plans? In fact, clients can make five years’ worth of tax-free gifts in one year, but only once every five years. That means they can contribute up to $75,000 at once ($150,000 for joint filers), helping to boost their account balance while simultaneously minimizing potential estate taxes.
Annual asset-based fees
|Enrollment year investment portfolios|
|Estimated annual asset-based fees||0.65% - 0.80%||1.15% - 1.30%||0.40% - 0.55%|
|Initial Sales Charge to Clients||3.50%*||0.00%||0.00%|
|Target Allocation Portfolios|
|Estimated annual asset-based fees||0.69% - 0.80%||1.19% - 1.30%||0.44% - 0.55%|
|Initial sales charge to clients||3.50%||0.00%||0.00%|
|Individual Fund Portfolios|
|Estimated annual asset-based fees||0.37% - 1.25%||0.37% - 1.75%||0.37% - 1.00%|
|Initial sales charge to clients||3.50%||0.00%||0.00%|
At this time, CollegeInvest is electing to waive 0.04% (4 basis points) of its 0.10% administration fee. While such waiver continues in effect, CollegeInvest will receive an administration fee at an annual rate of 0.06% (6 basis points) of the average daily net assets of each Portfolio. CollegeInvest may discontinue this waiver at any time without notice.
Scholars Choice offers distinct taxpayer advantages
Scholars Choice is the only financial professional-sold 529 plan that allows contributions to be deducted from a Colorado taxpayer’s state taxable income. For additional details, refer to the Tax FAQs.
Every state has different guidelines when it comes to state income tax advantages. When exploring 529 plan options, it is important to know what tax benefits are in place in your clients’ home state.
Now, Colorado-based business owners can get tax benefits, too
Not only can companies of any size offer a 529 plan via payroll direct deposit as an employee benefit, but recent tax legislation (2019) gives businesses a tax break when they contribute to their Colorado-based employees' 529 accounts.
For every dollar an employer contributes to an employee's Scholars Choice 529 account, the employer receives a 20% tax credit, up to a maximum of $500 per employee per year. So, an employer could give up to $2,500 per employee and receive a $500 Colorado state tax credit for each person.
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* 2.50% initial sales charge for certain enrollment portfolios. See the Plan Description for details.
1 TIAA-CREF Tuition Financing, Inc. (TFI) is the education savings division of TIAA.
There are various risks associated with an investment in the Scholars Choice Education Savings Plan; principal loss is possible. The Scholars Choice Education Savings Plan’s Investment Portfolios are subject to the risks of the underlying fund(s) in which they invest and other risks, as described in the Plan Description. To obtain a more complete description of the investment policies and risks of the underlying funds, please refer to the current prospectuses for the underlying funds. The Target Allocation Portfolios are currently comprised of four Investment Portfolios.
The Target Allocation Portfolios are designed for account owners who prefer a diversified Investment Portfolio with a fixed risk level rather than a risk level that changes as the Designated Beneficiary ages.
The Enrollment Year Investment Portfolios are intended for Account Owners who prefer an Investment Portfolio with a risk level that becomes increasingly conservative over time as the Designated Beneficiary approaches expected enrollment in an Eligible Educational Institution and/or expected year in which amounts will be withdrawn to pay for Qualified Higher Education Expenses. There are ten target Enrollment Year Investment Portfolios that invest in multiple underlying funds, each of which has a different investment strategy.
Before investing, carefully consider the investment objectives, risks, charges and expenses of the Scholars Choice Education Savings Plan, including whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investment in such state’s qualified tuition program. For this and other information that should be read carefully, please read the Plan Description or request one at 888-5-SCHOLAR (888-572-4652).
Participation in the Scholars Choice Education Savings Plan does not guarantee that the account’s assets will be adequate to cover future tuition or other higher education expenses, or that a designated beneficiary will be admitted to or permitted to continue to attend an institution of higher education. Contributions to an Account and the investment earnings if any, are not guaranteed or insured.