529

What is a 529 savings plan?

A 529 savings plan is a qualified tuition program designed to help you save for the cost of higher education. The average cost of a four-year private college education is nearly $100,000 today and will likely grow to $228,000 by 2022¹. The 529 plan offers a way to address these staggering costs.

When you contribute to a 529 plan, the money in the plan grows on a federal tax-deferred basis. Funds in the 529 plan can be withdrawn federal tax-free for qualified education expenses at any eligible college, university or graduate school in the U.S. That includes tuition, fees, books, room and board, and even some expenses for special needs students. There's simply no easier or more effective way to save for college today than with a 529 college savings plan.

The benefits of a 529 plan

529 plans are a smart way to save for college, and not just because of the federal tax advantages. A 529 plan offers accelerated gifting² and can be funded by depositing up to five years of contributions at once - without a federal gift tax. You can also enjoy special benefits designed to help you remove significant assets from your federal taxable estate without paying federal estate taxes or relinquishing control of those assets. A 529 plan offers great flexibility and control as well - you, as the Account Holder, decide when withdrawals are made, not the Beneficiary. You can change 529 Beneficiaries at any time, which is helpful when education plans change or are interrupted. And even though your contributions to the 529 plan are considered a gift and are removed from your federal taxable estate, as the account holder you maintain control and can take back the gift at any time.

The John Hancock Freedom 529³ provides more choice

The John Hancock Freedom 529 distinguishes itself from other college savings plans by offering more choice. Many 529 plans offer only a handful of mutual funds from a single mutual fund company. The John Hancock Freedom 529 plan, on the other hand, provides access to mutual funds from some of the nation's leading investment firms. With the John Hancock Freedom 529 you have the freedom to choose the investment strategy and plan that fits your individual needs and investment style. After all, you wouldn't apply to just one college. Why let only one investment company manage your college savings?

For more information on a 529 plan from John Hancock, click here.

¹The Annual Survey of Colleges of the College Board and Data Base, 2003-2004. © 2003 College Entrance Examination Board. All rights reserved. www.collegeboard.com.

²If donor elects that the gift be treated as having accrued over a five-year period, donor may make single gift of up to $60,000 (or $120,000 if married filing jointly) without triggering a gift tax. In future years, the amount of the annual gift tax exclusion will be increased by a cost of living adjustment. If additional gifts are made to the same Beneficiary during this five-year period, a federal gift tax may apply. If donor dies within this five-year period, a pro-rata share will be included in the donor's estate for federal estate tax purposes. State gift and estate inheritance tax laws may vary. Please check with your tax advisor.

³If the Account Holder or Beneficiary is not an Alaska resident, there may be 529 plans offered by their home state(s) that offer potential state income tax or other benefits to its residents that should be considered before investing. Please call 1-866-626-8529 to obtain a Plan Disclosure Document or prospectus for any of the underlying funds. The Plan Disclosure Document contains complete details on investment objectives, risks, fees, charges and expenses, as well as more information about municipal fund securities and the underlying investment companies that should be considered before investing. Your clients should read the Plan Disclosure Document carefully prior to investing. John Hancock Freedom 529 is a college savings plan offered by the Education Trust of Alaska, managed by T. Rowe Price, and distributed by John Hancock Distributors LLC through other broker/dealers appointed by John Hancock Distributors LLC. John Hancock Distributors LLC is a member of the NASD and is listed with the Municipal Securities Rulemaking Board (MSRB).

529 plans are not FDIC insured, may lose value and are not bank or state guaranteed.