Why haven’t you started saving for education yet?
NJBEST offers many features that NJ families are looking for like low contribution minimums, no sales charges, a wide range of investment options, innovative tools and special benefits exclusive to New Jersey families.
Or…
Do you still believe the myths about 529 savings plans?
Myths vs Facts
MYTH:
With NJBEST, my child will need to go to college in New Jersey.
FACT:
Your child doesn’t have to go to college in New Jersey! You can use NJBEST for most schools in the United States including vocational schools and certified apprenticeships, no matter where your 529 savings plan is based.
MYTH:
I can only use NJBEST if my child goes to a 4-year college or university.
FACT:
NJBEST can be used at most accredited two- and four-year colleges and universities and vocational schools, including many outside the U.S., as well as certified apprenticeships.
Additionally, up to $10,000 per year per beneficiary can be used for tuition for eligible public, private and religious primary and secondary educational institutions (K-12). What expenses will be regarded as “tuition” in the case of public schools may vary by state1
MYTH:
Grandparents cannot open a 529 plan, only parents can.
FACT:
Parents, grandparents, aunts, uncles, friends... almost anyone can be an account owner with a valid U.S. Tax ID and a permanent address. You can even open an NJBEST plan for yourself!
MYTH:
I make too much money to contribute to a 529 plan.
FACT:
It does not matter how much you earn. 529 plans have no income limits.
MYTH:
I can only open a plan if I have children.
FACT:
529 plans are for people of all ages! Are you considering changing careers or pursuing another degree? Are you planning to have children soon? You can always open an account in your name and change the beneficiary later to another person in your family.
MYTH:
NJBEST will only cover tuition, but I have so many other education expenses which are not covered.
FACT:
NJBEST savings can be used for any qualified tuition expense. Additionally, for accredited higher education schools (e.g. college, vocational schools, or certified apprenticeships ), savings can be used for additional qualified expenses including mandatory fees, supplies, books or other required equipment, and room and board, if the beneficiary is enrolled at least half-time.1
MYTH:
When my child turns 18, they will just take the money and use it for something else – like a new car.
FACT:
You have control! The NJBEST account owner owns the plan’s assets and controls how and when they will be used. Unlike an UGMA/UTMA, the NJBEST beneficiary has no legal rights to the plan’s assets, even when they turn 18.
Don’t you feel better about 529 plans?
Are you ready to open one?
Tax benefits are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Gift examples are general; individual financial circumstances and state laws vary – consult a tax advisor before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in their taxable estate. See the Investor Handbook for more complete information.
- Federal tax law provides that up to $10,000 per year may be withdrawn from a 529 savings plan federal income-tax free, if used for tuition expenses at private, public or religious primary and secondary (K-12) schools. It is not clear what public K-12 school costs, if any, will be regarded as tuition for this purpose. Additionally, amounts paid as principal or interest on certain existing loans of the Beneficiary or their sibling, subject to various limits including annual limits, can constitute qualified distributions. State tax benefits and treatment of withdrawals for K-12 tuition and loans may vary by state, may not have been updated for changes in federal tax law and may be uncertain; consult a tax professional concerning your state.
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 (877) 4NJ-BEST. 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 state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in its qualified tuition program.
This material is not a recommendation of any particular security, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified attorney, tax advisor, investment professional or insurance agent. Before making any financial commitment regarding a Section 529 college savings plan, consult with the appropriate financial advisor.
NJBEST New Jersey’s 529 College Savings Plan is 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 any particular primary or secondary school or to college or sufficient funds for primary or secondary school or for college. Please refer to the Investor Handbook for more complete information.
See the Investor Handbook for more information on NJBEST 529 College Savings Plan, including sales charges, expenses, general risks of the Plan, general investment risks and specific risks of investing in Plan portfolios, which can include risks of convertible securities; country, sector, region or industry focus; credit; derivative securities; foreign securities, including currency exchange rates, political and economic developments, trading practices, availability of information, limited markets and heightened risk in emerging markets; growth or value style investing; income; interest rate; lower-rated and unrated securities; mortgages, asset-backed and credit-linked securities; life settlement investments; restructuring and distressed companies; securities lending; smaller and midsize companies; and stocks.
