Perspectives Blog

Gifting strategies with 529 plans

Columbia Management, Investment Team | December 3, 2013

529 college savings plans allow parents and relatives to implement advanced gifting strategies. Contributions can be prorated over five years without incurring federal gift tax consequences. With a 529 plan the account owner maintains control of the assets in the account even though contributions are considered completed gifts. Parents and relatives can benefit from advanced gifting strategies available only with 529 plans. With the current an…

Capture five tax benefits with a 529 college savings plan

Columbia Management, Investment Team | March 21, 2014

By contributing to a 529 plan, you may benefit from tax advantages — without giving up control of plan assets. As an estate planning tool, 529 plans may allow removal of significant assets from your taxable estate. Investment growth in a 529 plan, as well as distributions, is not subject to the new 3.8% net investment income surtax. Owning a home. A financially secure retirement. A college education for a child or grandchild. These are a…

Five college savings myths set straight

Columbia Management, Investment Team | August 6, 2014

For college savers, 529 plans offer various tax benefits, flexibility and control. 529 account owners have a choice of state plans, regardless of residency or income level. 529 account beneficiaries can use funds at any eligible educational institution and for a number of expenses in addition to tuition. A 529 college savings plan is one of the smartest ways you can save for college, offering tax benefits, flexibility and control. Unfortunatel…

Could a 529 plan help you pay less for college?

Columbia Management, Investment Team | May 22, 2014

College savings plans offer an important tool for managing the cost of higher education. Saving in advance could offer a significant cost savings compared to taking loans during college. Use our 529 Savings vs. Loans Calculator to run your own personalized estimate. Saving for college early on can greatly benefit you in the long run. By saving in an investment vehicle such as a 529 college savings plan, you may be able to avoid relying on loan…

Maximizing workplace retirement plans to reduce or eliminate the net investment income tax

Abram Claude, Vice President, Columbia Management Learning Center | September 25, 2013

…t income tax (NIIT) is a new, permanent tax that is effective beginning in 2013. Investors’ workplace retirement plans, such as 401(k) plans, may offer several opportunities to reduce exposure to the tax. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax Regime” topic. Many higher-income investors with taxable investments encountered a new tax beginning in 2013: t…

Retirement plan design for the new tax regime

Abram Claude, Vice President, Columbia Management Learning Center | October 2, 2013

…reaking through the MAGI income threshold merit consideration as a NIIT strategy — and tax-advantaged retirement plans are great vehicles to facilitate the moves. Common tax-favored retirement plan types for small business owners include savings incentive match plans for employees (SIMPLE) IRA plans, simplified employee pension (SEP) plans and 401(k)/profit sharing plans. Pretax contributions to qualified retirement plans lower MAGI upfront, and…

Obamacare’s insurance exchanges

Columbia Management, Investment Team | December 9, 2013

…higher prices to reflect new coverage standards. State-by-state decisions to allow insurers to extend cancelled plans will, of course, affect the size and quality of initial ACA enrollment. Retaining existing plans could placate ACA critics, but could also undermine the law’s promise of enrolling people in health plans with broader coverage. Hospitals have aggressively sought to enroll patients in insurance exchanges, reasoning that many of thos…