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Facts About Oregon's 529 Plans

By    |   Thursday, 21 May 2015 02:14 PM

It is never easy to make a decision when a child’s future education is on the line. With costs of higher education rising higher and higher every year, the 529 plans are becoming a much better option when it comes to putting away money to pay for these ever rising costs.

Oregon has a pair of decent 529 college savings plans to choose from, but not everything in these plans is clearly written to warn parents of the risks involved.

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Here are six facts about the Oregon 529 plans to take into consideration before deciding how to contribute money for higher education costs:

1. Oregon has two 529 college saving plans in the state. The first is the Oregon College Savings Plan, which is a direct-sold 529 plan that is managed by TIAA-CREF and uses numerous different fund managers to run it. The second plan offered in Oregon is the advisor-sold savings program and offers contributors MFS managed mutual funds.

2. The Oregon College Savings Plan has both age-based and static portfolio plans that use mutual funds as well as investment options. The age-based plans have nine portfolios that base the investments on the age of the student, with them becoming more conservative as the student approaches college age. The static options include seven multi-fund portfolios and six single-fund options.

3. The MFS 529 Savings Plan is the advisor-sold program and offers five age-based options as well as four static multi-fund options and 14 individual-fund options. This is a situation where the investor should find an advisor in Oregon to help decide which plan is best for them.

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4. The contributions to an Oregon 529 plan are tax deductible up to a $2,265 annual limit for individuals and $4,530 for joint returns. This deduction is annually indexed for inflation purposes. However, unlike other plans, the Oregon laws do not make it clear if a taxpayer can roll over contributions. Many states allow up to five years of rollovers, but the rollover laws in Oregon are unknown and a tax specialist should be retained to deal with these options.

5. Even if someone from out of state contributes to the 529 Plan
, the Oregon resident who owns the account can still deduct the contribution. This means, if a grandparent or other relative from Texas contributes to an Oregon resident’s 529 plan, the Oregon resident can claim it as a deduction. As long as the contributor claims the contribution on their taxes, they get an immediate annual return of about 9 percent.

6. People who already have a 529 Plan from another state can move their assets to the Oregon College Savings Plan. The former plan can be transferred over once in a 12-month period of time without incurring any federal income tax at all.

However, it is always important to compare the plan currently used to Oregon’s plan to see if the tax breaks are actually better or worse in the transfer. Oregon law does not state whether or not this transfer would be a tax deduction in the state.

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It is never easy to make a decision when a child's future education is on the line. With costs of higher education rising higher and higher every year, the 529 plans are becoming a much better option when it comes to putting away money to pay for these ever rising costs.
529 plan, facts, oregon
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2015-14-21
Thursday, 21 May 2015 02:14 PM
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