College Planning

Saddle River Capital Management can assist you with any of the following four college savings plans.

With a 529 plan such as our American Funds College America® – Named one of the top five 529 plans for 2006 by Morningstar – you can save for anyone — your child or grandchild, a niece or nephew, a friend or even yourself.

• You can contribute up to $12,000 ($24,000 for married couples) annually without gift-tax consequences. Under a special election, you can invest up to $60,000 ($120,000 for married couples) at one time by accelerating five years’ worth of investments.
  
• You can contribute until your account value reaches $250,000.
  
• Earnings can grow tax-free.
  
• Withdrawals for qualified higher education expenses are free from federal tax.
• Withdrawals for non-qualified expenses are subject to ordinary federal income tax plus a 10% penalty on the earnings.
  
• There are no income limits. You can contribute no matter how much you earn.
  
• You maintain control of the assets.
  
• You can contribute up to $2,000 a year.

Education savings accounts can be used to pay for your child’s qualified expenses from kindergarten through high school, 2 as well as for higher education.

• You can contribute up to $2,000 a year.
  
• Earnings can grow tax-free.
  
• Withdrawals for qualified expenses are free from federal tax.
  
• There are income restrictions. If your income exceeds certain limits, you will not be eligible to contribute.
  
• You can change investment options as often as you wish.

UGMA/UTMA custodial accounts let you take advantage of your child’s lower tax rate while saving for your child’s education.

• There are no contribution limits.
  
• For children under the age of 18, the first $850 of earnings is tax-free. Earnings between $850 and $1,700 are taxed at the child’s rate; earnings above $1,700 are taxed at the parents’ rate. All earnings for children age 18 and older are taxed at the child’s rate.
  
• There are no income limits. You can contribute no matter how much you earn.
  
• The beneficiary gains control of the assets at age of majority, which is age 18 or 21 in most states.

Saving for your child’s education through a parents’ investment account allows you maximum control of the assets.

• There are no contribution limits.
  
• Earnings are taxed to the owner.
  
• There are no income limits. You can contribute no matter how much you earn.
  
• You maintain control of the assets and decide when withdrawals will be made.
  

Contact Us for more information on College Planning