Together with the State of Michigan, Allianz Global Investors Distributors and TIAA-CREF Tuition Financing Inc. have created a flexible, robust 529 plan. Below, are just some of the Plan Highlights and Benefits of the MI 529 Advisor Plan.
- Open to all U.S. Citizens and Resident Aliens – Although designed for Michigan residents, the MI 529 Advisor Plan is open to any U.S. citizen or resident alien. In order to establish an account, you must have a valid Social Security or other taxpayer identification number as well as a valid U.S. residential address that is not a post office box.
- Designed for Individuals Saving for College – You can open a 529 plan for a child, grandchild, friend, or even yourself. 529s are a great way to save for college and they offer a wide variety of benefits that you cannot find anywhere else.
- Federal Income Tax Advantages – Your 529 Assets grow tax-deferred as long as the money is kept in your account. Earnings are also exempt from federal income tax when used for qualified higher education expenses. Qualified higher education expenses include tuition, fees, room, board, books, equipment and other supplies.*
- Michigan State Tax Advantages – Michigan residents can take advantage of a Michigan income tax deduction when contributing to the MI 529 Advisor Plan. The MI 529 Advisor Plan allows contributions to be deducted from your Michigan taxable income annually, up to $5,000 for single filers and up to $10,000 for joint filers.**
- Low Minimum Initial Investment – Invest as little as $25 per portfolio every time you contribute to your MI 529 Advisor Plan account.
- High Maximum Contribution Limit –The MI 529 Advisor Plan has a maximum contribution limit of $235,000 (Including contributions in the Michigan Education Savings Program (Direct Program) and the Michigan Education Trust).
- Gift Tax Advantages – Contribute up to $70,000 in a single year ($140,000 for married filing jointly) for each beneficiary without incurring federal gift tax. Please note: You will not be able to make any additional gifts to the beneficiary for the next five years if you take advantage of this special provision.***
- Anyone is Eligible to Contribute – Anyone, not just the account owner can contribute to a MI 529 Advisor Plan Account. If the contributor is a resident of Michigan, they can also take advantage of the Michigan income tax deduction. In addition, the plan does not have any income or age restrictions.
- Nineteen Investment Options – Choose from six Age-Based Investment Portfolios, two Static Investment Portfolios, and eleven Individual Investment Portfolios. These portfolios vary based on investment strategy and underlying risks. You should work closely with your financial advisor to determine your appropriate risk tolerance, time horizon, and investing strategy.
- Multi-Manager Plan – The MI 529 Advisor Plan provides access to some of the world’s strongest investment managers including Pacific Investment Management Company LLC (PIMCO), Allianz Global Investors US LLC, NFJ Investment Group (NFJ), & Teachers Advisors Inc. (TIAA-CREF).
- Ability to Change Investments or redeem with One Phone Call – Easily change the investments in your account or redeem from your account with a simple phone call. This allows you to minimize paperwork and saves time too. However, reallocations are generally limited to once per year.
- The Account Owner Controls the Money – Even after the child reaches the “age of majority”, the Account Owner still retains control of the MI 529 Advisor Plan assets (yet the money is outside of your estate for tax purposes).
- Ability to Change the Beneficiary – Change the beneficiary on your account at anytime to any family member of the beneficiary or even yourself.****
- Sales and Marketing Support from Allianz Global Investors – one of the world’s leading asset management companies.
*If you use the money for any other purpose, including paying for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to applicable federal and state income tax and an additional 10% federal tax.
**Transfers from the Direct Program will not entitle the Account Owner or contributor to a State tax deduction or any other additional benefit under State or federal tax law.
***If the donor does not survive the 5 year gifting period, a pro-rated amount will revert back to the donor's taxable estate.
****Certain restrictions apply. Please reference the Plan Disclosure Statement for additional details.