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Primary goal
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Save for elementary, secondary, or higher education expenses1
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Save for elementary, secondary, or higher education expenses
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Save for a broad set of goals to the benefit of the minor
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Tax advantages
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Tax-deferred growth potential; tax-free qualified withdrawals2
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Tax-deferred growth potential; tax-free qualified withdrawals3
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Potential growth taxed at special rates4
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Contribution limit
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$550,000 lifetime limit per beneficiary5
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Annual limit of $2,000 (income limits apply)6
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No limit
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Gift limit without incurring gift tax
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$95,000 ($190,000 joint) in a single year7
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$2,0008
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$19,000 per year ($38,000 joint)
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Account ownership
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Adult (or child if a custodial 529)
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Adult, until assets are transferred to the student
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Transfers to child at age 18 or 219
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Investing options
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Choice of Static Allocation Portfolios, Enrollment Year Portfolios, and Individual Fund Portfolios
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Open
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Open
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Financial aid impact
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Minimal10
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Minimal11
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Potentially significant12
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Age limits
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None; assets can be held indefinitely.
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Contributions can be made until the beneficiary reaches age 18. Funds must be distributed to beneficiary by age 30.
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Beneficiary must be under age 18 when account is opened.
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Ability to change beneficiary
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Anytime
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Until beneficiary reaches age 30
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Never
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Transfers
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Rollovers permitted to other 529 plans or beneficiary's Roth IRA. Transfers to other accounts may be taxable.
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Rollovers to 529 permitted if 529 is minor-owned. ESAs transferred to other accounts may be taxable.
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Transfer to UGMA/UTMA 529 is permitted provided beneficiary remains the same. Transfers may be taxable.
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More information
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Schwab 529 Education Savings Plan
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Schwab Education Savings Account (ESA)
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Schwab Custodial Accounts (UGMA/UTMA)
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