Ivy InvestEd 529 Plan
A 529 college savings plan offers you control as the account owner and flexibility in your investment choices, including age-based portfolios and a range individual fund investments.
Control, flexibility and transferability
When you open an Ivy InvestEd 529 Plan account, you are the "owner" of the account for the benefit of your selected beneficiary, such as your child, grandchild, niece or nephew. So, if your selected beneficiary chooses not to go to college, you can simply transfer the account to another direct family member of the beneficiary or if you simply want to change the beneficiary you may. Also, any U.S. citizen or resident, including your friends or relatives, can contribute to an Ivy InvestEd 529 Plan account.
High contribution limits, no income restrictions
With the Ivy InvestEd 529 Plan, you can make contributions, until a maximum balance of $412,000 (2014-2015 academic year) is reached for all Program accounts per beneficiary. Plus, there are no income restrictions on the account owner, so you'll remain eligible to maintain your Ivy InvestEd 529 Plan account regardless of your income.
Earnings in your Ivy InvestEd 529 Plan account grow federal income tax-deferred. And all withdrawals are federal income tax-free if they are applied to qualified higher education expenses, such as tuition, fees, room and board, and books. Please note that state and local taxes may apply. States may offer some tax breaks such as a deduction for contributions or income exemption on withdrawals.This information is based on current tax laws, regulations, rules and interpretations, which are subject to change at any time. Please consult your tax advisor regarding your individual circumstances.
The availability of tax or other benefits may be conditioned on meeting certain requirements, such as residency or purpose for or timing of distributions. Taxes are deferred until withdrawal. The earnings portion of a non-qualified withdrawal is subject to a 10% penalty as well as federal and/or state taxes.
Estate planning advantages
Especially important for grandparents or other relatives, contributions to an Ivy InvestEd 529 Plan account are excluded from the donor's taxable estate for federal tax purposes (assuming the donor is not the beneficiary). Thanks to the annual gift tax exclusion, grandparents, other relatives and friends can contribute up to $70,000 ($140,000 for married couples) to each beneficiary and spread the contribution over five years for gift tax purposes, as long as they do not make additional contributions to the same beneficiary during the five years, by making an election on the federal gift tax return. Please remember that if the contributor dies before the end of the five-year period, the portion of the gift allocable to the years remaining in the five-year period would be in the contributor's estate for federal estate tax purposes.
It's easy to get started
You can become Ivy InvestEd 529 Plan with as little as $750, or you can start with only $150 per fund and subsequently, a minimum of $50 per month if you contribute that amount regularly with an automatic investment plan created through the Ivy InvestEd 529 Plan's Automatic Investment Service (AIS). Periodic investment programs cannot guarantee a profit or protect against a loss in a declining market, they can help avoid the possibility of investing money at the wrong time – when prices may be at their highest. Periodic investing involves continuous investment in securities, regardless of fluctuating price levels of securities. As a result, your financial ability to continue to participate in this program during periods of low price levels should be considered.
The Ivy InvestEd 529 Plan offers multiple investment options, including sixteen Individual Fund Portfolios, three Age-Based Portfolios, and three Static Portfolios.
The Age-Based Portfolios are based on a beneficiary's college time horizon and seek an appropriate level of investment risk for that time horizon. Organized as a "fund of funds", the Age-Based Portfolios help diversify your investment among a variety of mutual funds within the Waddell & Reed Advisors Funds and/or Ivy Funds℠ mutual funds families. The Age-Based Portfolios consist of: the Growth Portfolio (ages 0 through 8), the Balanced Portfolio (ages 9 through 15) and the Conservative Portfolio (ages 16 and older). Each portfolio is a series of InvestEd Portfolios, a mutual fund registered under the Investment Company Act of 1940. The Age-Based Portfolios are designed to invest in mutual funds with greater exposure to equity investments when the named beneficiary is between the ages of 0 through 8, a more balanced exposure to equity and fixed income investments when the named beneficiary is between the ages of 9 through 15, and a greater exposure to fixed income securities when the beneficiary reaches the age of 16 and is closer to commencing his or her postsecondary education. The balance in an Ivy Funds InvestEd 529 Plan account is automatically exchanged to a different Age-Based Portfolio within approximately thirty (30) days of the beneficiary's 9th and 16th birthdays.
The Static Portfolios option offers three actively managed portfolios allowing you to stay in the portfolio of your chosen risk tolerance, whether it be growth, balanced or conservative, regardless of beneficiary’s college time horizon.
Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.
Prices & Returns
POP as of 2/24/2017
Average Annual Total Returns
POP as of 1/31/2017
|WBLAX||InvestEd Balanced Portfolio||$11.26||$0.00||4.65%||3.64%||1.92%||5.86%||4.22%||5.26%||10/1/2001||1.02%||1.02%|
|WICAX||InvestEd Conservative Portfolio||$10.41||$0.00||2.46%||2.38%||1.28%||4.01%||4.18%||3.95%||10/1/2001||0.85%||0.85%|
|WAGRX||InvestEd Growth Portfolio||$11.46||$0.00||6.11%||6.50%||2.60%||7.71%||5.32%||6.49%||10/1/2001||1.13%||1.13%|
What if my child (or designated beneficiary) receives a scholarship?
If your child or designated beneficiary receives a scholarship for higher education, the account owner may withdraw an equal amount from your Ivy InvestEd 529 Plan. Although you would pay taxes on the earnings portion of the withdrawal, you would have no federal tax penalties associated with the withdrawal. Withdrawal amounts that exceed the amount of the scholarship that you DON'T use for qualified higher education expenses of the designated beneficiary will be subject to income taxation on the earnings portion. You may also incur an additional 10% federal penalty on the earnings.1 The taxes will generally be applied at the tax rate of the person for whose benefit the withdrawal is made.
What if my child doesn't go to college?
One of the advantages of 529 plans is that account owners can change beneficiaries without penalty. If your child chooses not to go to college, you can change beneficiaries without penalty, as long as the new designated beneficiary is a member of the original designated beneficiary's family, as defined by the tax laws.2 If you choose to withdraw the money you have accumulated in your Ivy InvestEd 529 Plan account for non-qualified expenses instead of passing it onto a new designated beneficiary, the earnings portion of the non-qualified withdrawal generally will be subject to income tax at the tax rate of the person for whose benefit the withdrawal is made. In addition, a 10% penalty on the earnings will apply.2
Does the Ivy InvestEd 529 Plan offer estate-planning benefits?
I'm invested in another 529 plan. Can I transfer my account to an Ivy InvestEd 529 Plan?
Yes, transferring from one 529 plan to another requires completing a 529 Plan Transfer Request Form. You may generally roll over an account without limit if the new account appoints a new designated beneficiary.3 In addition, you may roll over an account with the same designated beneficiary one time during a 12-month period.
Are the Ivy InvestEd 529 Plan investments guaranteed?
Can I still contribute to my Designated Beneficiary's Coverdell Education Savings Account?
Do I have to select a college now?
Can I borrow money against my Ivy InvestEd 529 Plan account?
Can my spouse and I set up a joint account?
No. One person must establish each Ivy InvestEd 529 Plan account; however, anyone may contribute to the plan once it is established. For example, parents, grandparents, other relatives and friends may pool contributions in one designated beneficiary's account. Although only one person may be indicated as the account owner, a successor account owner should be designated on the Ivy InvestEd 529 Plan account application in the event of the account owner's death.4
Can organizations establish Ivy InvestEd 529 Plan scholarship programs?
Who manages the Ivy InvestEd 529 Plan?
Is there a minimum amount I must invest to open an Ivy InvestEd 529 Plan account?
How do I make a withdrawal from my Ivy InvestEd 529 Plan account?
- The earnings portion of any non-qualified withdrawals (i.e., generally those not used for qualified higher education expenses) is subject to a federal tax and possibly state tax. In addition, the earnings portion of a non-qualified withdrawal is subject to an additional federal penalty in the form of an additional 10% tax on the earnings portion of the withdrawal. The 10% penalty does not generally apply to certain distributions made after the death or disability of the designated beneficiary or after the receipt of certain scholarships.
- There may be federal gift or generation skipping transfer tax consequences if the new designated beneficiary is a member of a younger generation than the prior designated beneficiary.
- Although the U.S. Department of Education has advised several 529 plans regarding the treatment of accounts in 529 plans for financial aid purposes, the treatment is subject to change by regulations, legislation or otherwise. Specific educational institutions may also treat 529 plan investments in a different manner. Accounts for which the designated beneficiary is also the account owner may be treated as if it were an asset of the parent for financial aid purposes.
- The tax treatment and state law probate treatment of the designation of a successor account owner and the transfer of ownership to such successor is not certain and may vary depending on the particular facts and state law involved.
Interested in opening an Ivy InvestEd 529 Plan account?
Investing is about making wise decisions. It begins with selecting a skilled financial advisor who will partner with you to determine the right investments designed to help you meet your long-term goals. Ivy InvestEd 529 Plan offers these kinds of investments. Talk to your advisor today about setting up an Ivy InvestEd 529 Plan account.
Already an Ivy InvestEd 529 Plan account holder or need additional information?
If you have questions, comments or concerns about your Ivy InvestEd 529 Plan account, please contact our client services department.
Toll-free Phone & Fax
Automated account access and fund information are available 24 hours a day. Client service representatives are available 7:30 a.m. to 7 p.m. CST, Mon. - Fri.
InvestEd Client Services
Post Office Box 29217
Shawnee Mission, KS 66201-9217
InvestEd Client Services
6300 Lamar Avenue
Overland Park, KS 66202-4247
The InvestEd Growth Portfolio and InvestEd Balanced Portfolio shares are charged a front-end sales load of 5.75% for purchases up to $50,000. InvestEd Conservative Portfolio shares are charged a front-end sales load of 4.25% for purchases up to $50,000. A $20 account maintenance fee is not included in the calculations.
Before investing, investors should carefully consider the investment objectives, risks, charges and expenses of the IVY InvestEd℠ 529 PLAN. This and other important information is contained in the IVY InvestEd℠ 529 PLAN Program Overview, IVY InvestEd℠ 529 PLAN Account Application, and the prospectuses, or if available, summary prospectuses, all of which may be obtained here or from a financial advisor. Read them carefully before investing.
Non-residents or tax-payers of states other than Arizona should consider participating in the 529 plan(s) available in their state of residence as such plan(s) may offer more favorable state income tax or other benefits than those offered under the Ivy InvestEd 529 Plan.
The Ivy InvestEd 529 Plan and shares of InvestEd Portfolios are offered by Waddell & Reed, Inc. as part of the Arizona Family College Savings Program Trust Fund, a 529 plan administered by the Arizona Commission for Postsecondary Education (the Program”). Waddell & Reed, Inc. is one of multiple financial institutions eligible to offer investments under the Program. Accounts are not insured by the State of Arizona, the Trust, the Arizona Commission for Postsecondary Education, or any other governmental entity, Waddell & Reed, Inc., or any affiliated or related party, and neither the principal deposited nor the investment return is guaranteed by any of the above referenced parties.
Investment return and principal value will fluctuate, and it is possible to lose money by investing.
This information is provided for informational and educational purposes only.
The information provided may include references to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to assist in the understanding the issues discussed. Neither Waddell & Reed, Inc., nor its financial advisors associated with Waddell & Reed give tax, legal, or accounting advice. You may want to consult with your accountant or tax advisor to discuss your personal situation.
Past performance is not a guarantee of future results. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance.