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What is a 529 Plan?

Tax-Advantaged

Savings Program

A Section 529 qualified tuition program (529 plan) is a tax-advantaged savings program designed to help you save for college. You can use the assets held in your 529 account to pay for your beneficiary’s tuition, fees, books, and certain room and board costs, not only in Montana, but at eligible schools anywhere around the country. Funds from a 529 account can be used at eligible two- and four-year schools, trade and technical institutes, and even graduate schools.

Why 529 Plans?

To increase access to higher education and help alleviate the burden of student loan debt on our society. The problem is clear: student loan debt in America is reaching levels that the U.S. Department of Education deems a crisis. To help keep that from preventing our kids from going to college, 529 college savings plans are a way for families to save and reduce their reliance on loans.

Did You Know?

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The average student loan payment is $393 per month.1

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Student loan debt is the second-highest debt category behind only mortgage debt.2

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Trillion

Americans collectively owe $1.5 trillion in student loans.2

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Children who know they have college savings accounts are six times more likely to attend college.3

529 Plan

529 savings can be combined with student aid and scholarships to help pay for the full cost of college.

Achieve Montana at a Glance

Low Minimums

You can open an account for as little as $25 and make additional contributions of $25, or $15 with payroll deduction, where available.
High maximums: Contribute up to a total of $396,000 per beneficiary for accounts in all 529 Plans sponsored by the State of Montana.

 

Competitive Fees and Expenses

Achieve Montana’s investment options have annual asset-based fees ranging from 0.395% to 0.587%. There is no annual account maintenance fee if you are a Montana resident, use an automatic investment plan (AIP), take advantage of payroll deduction through your employer (if available), or maintain an account balance equal to or greater than $25,000. All other accounts are subject to an annual account maintenance fee of $25.

Range of Investment Options

Families have different investment goals, so Achieve Montana lets you choose from a variety of investment styles and asset classes, comprised of mutual funds and other investments from leading investment firms including Blackrock Fund Advisors, Dimensional Fund Advisors, Charles Schwab Investment Management, New York Life and the Vanguard Group.

Tax-Deferred Earnings

Your account earnings grow deferred from both federal and state taxes.

 

Federal and State Tax-Free Qualified Withdrawals

When your child is ready for college, you can withdraw the money from your Achieve Montana account free from federal and Montana state income taxes if the money is used to pay for qualified higher education expenses.4

 

Montana Tax Benefits

Special tax benefits for Montana taxpayers: Contributions you make to Achieve Montana may be eligible as a yearly deduction of up to $3,000 per taxpayer per year ($6,000 for those married, filing jointly) from adjusted gross income in computing Montana state income tax. To be eligible, the contribution must be made to your account, an account owned by your spouse, or an account owned by your child or stepchild if your child or stepchild is a Montana resident.5

 

Gift and Estate Tax Planning Benefits

Your contributions also qualify for the federal $17,000 ($34,000 if married, making a proper election) annual gift exclusion. Special tax benefits for Montana taxpayers: Contributions you make to Achieve Montana may be eligible as a yearly deduction of up to $3,000 per taxpayer per year ($6,000 for those married, filing jointly) from adjusted gross income in computing Montana state income tax. To be eligible, the contribution must be made to your account, an account owned by your spouse, or an account owned by your child or stepchild if your child or stepchild is a Montana resident.5 Reduce your personal taxable estate by making five years’ worth of gifts to a beneficiary (up to $85,000; $170,000 if married, making a proper election) in one lump sum.6

1 Board of Governors of the Federal Reserve System Report on the Economic Well-Being of U.S. Households in 2016- May 2017.
2 Friedman, Forbes.com: Student Loan Debt Statistics in 2018: A $1.5 trillion crisis.
3 Washington University in St. Louis: Kids with Savings Accounts in Their Name Six Times More Likely to Attend College (2011)
4 Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes.The availability of tax or other benefits may be contingent on meeting other requirements. A withdrawal used to pay tuition at a public, private, or religious elementary or secondary school is not subject to federal taxation.
5 Contributions may be subject to recapture in certain circumstances, such as a federal non-qualified withdrawal, rollovers to another state’s 529 plan, or a withdrawal from an account that was opened within one year prior to the date of the withdrawal, as described in the Program Description. (Recaptured Withdrawal). If the account owner is no longer a Montana resident at the time of a Recaptured Withdrawal, we may withhold the potential recapture tax from the Recaptured Withdrawal.
6 In the event the contributor does not survive the five-year period, a pro-rated amount will revert back to the contributor’s taxable estate.
For more information about Achieve Montana, call 877.486.9271 or download an Enrollment Kit. The Enrollment Kit includes a Program Description that discusses investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.
If you are not a Montana taxpayer, before investing in Achieve Montana, you should consider the benefits of your home state’s qualified tuition program. It may provide taxpayers with state tax and other benefits such as financial aid, scholarship funds and protection from creditors, that are only available through your home state’s qualified tuition program. You should also consult your financial, tax, or other advisor to learn how state-based benefits (or limitations) would apply to your specific circumstances. Tax and other penalties may apply to non-qualified withdrawals.
Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision. In addition, you should periodically assess, and if appropriate, adjust your Section 529 Plan investment choices with your time horizon, risk tolerance and investment objectives in mind.
Achieve Montana is sponsored by the State of Montana and administered by the Montana Board of Regents of Higher Education, as sole trustee of the Montana Family Education Savings Trust (Trust). Ascensus College Savings Recordkeeping Services, LLC serves as program manager and provides recordkeeping and administrative support services for Achieve Montana. Blackrock Fund Advisors, Dimensional Fund Advisors LP, Charles Schwab Investment Management, Inc., New York Life Insurance Company and the Vanguard Group, Inc. each provide investment management services for the underlying investments comprising Achieve Montana’s portfolios. Although some of the portfolios invest in mutual funds, they are not mutual funds. When you invest in Achieve Montana, you are purchasing portfolio units issued by the Trust. Except to the extent of the New York Life Insurance Company guarantee that is available for the Capital Preservation Portfolio and certain Year of Enrollment Portfolios, investment returns are not guaranteed, and you could lose money by investing in Achieve Montana.
Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.
Upromise is an optional service offered by Upromise, Inc., is separate from Achieve Montana, and is not affiliated with the State of Montana. Terms and conditions apply to the Upromise service. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice. Transfers from Upromise to an Achieve Montana account are subject to a $25 minimum. Go to upromise.com to learn more about Upromise.
Upromise and the Upromise logo are registered service marks of Upromise, Inc. Ugift is a registered service mark of Ascensus Broker Dealer Services, Inc., an affiliate of Ascensus College Savings Recordkeeping Services, LLC.
Vanguard is a registered mark of The Vanguard Group, Inc. All other trademarks, service marks or registered trademarks are the property of their respective owners. Used with permission.