As a parent, you can open NJBEST 529 College Savings Plans for as many children as you want, with a minimum investment of only $25 per child. You can continue contributing up to a maximum plan value of $305,000 for each child.
You control the plan, and may change the beneficiary to any family member at any time. This means if one child decides against college, the plan can be earmarked for another child in the beneficiary's family.
While it's hard to find extra dollars to set aside in the typical family's budget, taking this important step today could be especially rewarding tomorrow.
Put time on your side
Starting your investment program early can save you thousands of hard-earned dollars by the time college starts.
The Power of Compounding
Hypothetical growth of various monthly investment amounts earning 8%
annually compounded monthly before tax:
Monthly Investment
5 Years
10 Years
18 Years
$500
$36,983
$92,083
$241,643
$400
$29,587
$73,666
$193,315
$300
$22,190
$55,250
$144,986
$200
$14,793
$36,833
$96,657
$100
$7,397
$18,417
$48,329
$50
$3,698
$9,208
$24,164
$25
$1,849
$4,604
$12,082
Table represents how monthly investments would grow over time periods shown before any tax,
assuming investments compound monthly at an 8% annual rate of return. The table is for illustrative purposes only and does not reflect
an actual investment or 529 plan fee and expenses, which if reflected, would lower results shown—see the list of 529 pan fees and
expenses on this page. The principal value of investments is not guaranteed, and you may have a gain or loss on the amount
invested. Periodic investment plans do not assure a profit and do not protect against loss in a declining market. Since
such plans involve continuous investment in securities regardless of their fluctuating price levels, it's prudent to
consider your financial ability to continue making purchases through periods of low price levels.
Tax-Free Compounded Growth Over Time
Starting early puts compounding's power on your side. Combining compounding with the advantages of tax-free investing can really help plan earnings increase.
The following table shows how tax-free compounded growth can help your money grow.
Hypothetical growth of a $10,000 taxable and tax-free investment, earning a fixed 8% return compounded monthly over various time frames
Growth After this Many Years
Value of Tax-Free Investment
Value of Taxable Investment
Dollar Difference
5 years
$14,898
$13,430
$1,468
10 years
$22,196
$18,037
$4,160
18 years
$42,006
$28,912
$13,094
Table assumes contributions were made at the beginning of the year, that a combined 26.8%
federal and New Jersey state tax rate applies to the taxable investments at the end of the year, that
principal and income do not vary and that earnings are tax free the entire period.
Each plan account is subject to an annual program management fee of 0.40% of assets and underlying fund expenses,
currently up to 0.82% of assets, which may vary. See the Investor Handbook for more complete information.
These expenses are not reflected in the table, if they were, amounts would be lower.
Tax benefits may be conditioned on meeting certain requirements. Federal tax, a 10% penalty and state tax apply to nonqualified withdrawals of earnings.
Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the
contributor. See the Investor Handbook for more complete information.
NJBEST qualified withdrawals are free from New Jersey state income tax for New Jersey taxpayers only; taxpayers of other states
may be subject to state income taxes on qualified withdrawals. If you pay state taxes in other states, you should evaluate whether
such state(s) offer(s) tax incentives or benefits that may not be available to you or your beneficiary under NJBEST.
Examples are for illustrative purposes only and do not represent any particular investment. 529 plans do not guarantee your investment or any specific rate of return and you may have a gain or a loss on the amounts invested. Periodic investing plans do not assure a profit and do not protect against loss in a declining market. Since such plans involve continuous investment in securities regardless of their fluctuating price levels, it's prudent to consider your financial ability to continue making purchases through period of low price levels.
Automatic investing
Automatically debiting your checking account is a fast, easy way to stick with an investment program. To learn more about this option, click "Automatic investing" in the navigation menu to the left.
Investors should carefully consider plan investment goals, risks, charges and expenses before investing. To obtain the Investor Handbook, which contains this and other information, call Franklin Templeton Distributors, Inc., the manager and underwriter for the plan, at 1-877/4NJBEST or click here. You should read the Investor Handbook carefully before investing and consider whether your or the beneficiary's home state offers any state tax or other benefits that are available for investments only in its qualified tuition program.
Footnote
1.
Offered and administered by the New Jersey Higher Education Student Assistance Authority
(HESAA); managed and distributed by Franklin Templeton Distributors, Inc., an affiliate of Franklin Resources, Inc.,
which operates as Franklin Templeton Investments. No federal or state guarantee. Principal value may be lost, and
investing in the plan does not guarantee admission to college or sufficient funds for college. Please refer to the
Investor Handbook for more complete information.
