529 College Investing
  • Tax Advantages – Any earnings generated will be federal (and possibly state) income-tax-free as long as withdrawals are used for qualified higher education expenses.2 Certain states may offer tax or other benefits for investing in their Section 529 plans.3
  • Contributions – Most Section 529 plans have lifetime contribution limits of $250,000 or more per beneficiary, and age limits on contributions or withdrawals. Gift tax restrictions apply.4 529 College Savings Plan contributions are considered completed gifts and are excluded from your taxable estate for estate tax purposes.
  • Limits – No age limit on contributions and withdrawals. No income limits on contributions.
  • Financial Aid – Favorably treated from a financial aid standpoint.5
  • Making Contributions - Most Section 529 plans have lifetime contribution limits of $250,000 or more per beneficiary. Gift-tax restrictions apply. No age limit on contributions or withdrawals.4 
  • Gifting - "Forward-gift" up to $70,000 ($140,000 for married couples) per child in a single 5-year period.4 Contributions are considered completed gifts, and are removed from the donor’s taxable estate for estate tax purposes.
  • Tax Advantages - Any earnings generated will be federal (and possibly state) income tax-free as long as withdrawals are used for qualified higher education expenses.2,3 
  • Account Ownership - The account owner (usually the parent) controls or "owns" the account.
  • Limits - No age limit for when 529 plan contributions can be made for the beneficiary of the account.
  • Beneficiary - The account owner can change the beneficiary at any time to another qualified family member as defined by the Internal Revenue Code with no tax consequences.6 
  • Covered Expenses - Funds can be used for qualified higher education expenses at any accredited college or university in the U.S. Some foreign schools may also be eligible. Use for expenses such as:3,7

    - Tuition
    - Fees
    - Books
    - Required supplies and equipment
    - Room and board8
    - Certain expenses associated with special needs beneficiaries
  • Note that withdrawals from a 529 account can be taken at any time for any reason. If funds are not used for qualified higher education expenses, any earnings withdrawn that are not used for such expenses are subject to federal income tax and a 10% additional federal tax, and state and local income taxes may apply.9 
NextGen® Client Direct 529 Series
NextGen Direct is available to self-directed investors. The plan is a Section 529 plan established by the State of Maine and administered by the Finance Authority of Maine, and is available to anyone, age 18 or the minimum legal age in his/her jurisdiction, regardless of residency, income, or age of the beneficiary. Merrill Lynch, Pierce, Fenner & Smith Incorporated is the program manager, underwriter and distributor. Use our State Tax Calculator to see if your state plan may offer you tax advantages.
NextGen Direct allows you to choose the investment options to suit your college planning needs, risk tolerance and time horizon.
Range of portfolios
  • Single fund portfolios invest in a single underlying mutual fund, allowing for an allocation based on the fund's investments. The Single Fund Portfolio will be reviewed at least annually.
  • Stable Principal Portfolios are portfolios that strive to retain principal.
    • The Principal Plus Portfolio may invest in guaranteed investment contracts issued by one or more insurance companies, corporate fixed-income investments, cash equivalents and/or similar instruments, and may make deposits in an interest-bearing FDIC-insured bank account.1 
    • The NextGen Savings Portfolio is comprised exclusively of deposits in an interest-bearing FDIC-insured bank account.10 
Diversified investments
  • You can invest with several different fund families in the same account for additional diversification.
  • NextGen offers exchange-traded fund (ETF) investment portfolios to direct investors.
Fees and Charges
View the pricing page to see any fees and charges that may apply to the NextGen Direct Account.
Want guidance choosing your 529?
A member of our team of Financial Solutions Advisors from the Merrill Edge Advisory Center can discuss Section 529 plan options with you. The Merrill Edge Advisory Center offers the NextGen® Client Select Series 529 Plan, established by the State of Maine and administered by the Finance Authority of Maine. Certain states may offer tax or other benefits for investing in their Section 529 plan. So it’s important to consider any benefits available in your home state, or the home state of your designated beneficiary. Also consider the plan’s investment manager, investment options, plan performance and underlying fees and expenses before you invest.
The NextGen Client Select Series is available to anyone, age 18 or the minimum legal age in his/her jurisdiction regardless of residency, income, or age of the beneficiary. Merrill Lynch, Pierce, Fenner & Smith Incorporated is the program manager, underwriter and distributor.
The NextGen Client Select Series offers a broad selection of investment options, including 30 investment portfolios through seven different asset managers.
Please contact the Merrill Edge Advisory Center at 1.888.MER.EDGE (1.888.637.3343) for more information or to schedule a consultation.
Not sure if a 529 plan is right for you?  Compare college investment productsCompare college investment products 
NOTE: Certain states may offer tax or other benefits for investing in their Section 529 plan. Some states may reduce or eliminate those benefits for investments in Section 529 plans administered by a state other than your home state or your beneficiary’s home state. It is important to carefully consider any benefits available in your home state (or the home state of your designated beneficiary), along with a plan’s investment manager, investment options, plan performance and underlying fees and expenses prior to investing. Certain states also may require the recapture of all or part of previously claimed tax benefits if the proceeds are not used for qualified higher education expenses (as defined by the federal tax law) or if the assets are transferred to another state's Section 529 plan.
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Today's lesson: A lighthearted take on how a 529 plan can help you invest for your child's college education.
College Planning Tool
Please remember there's always the potential of losing money when you invest in securities.

Before you invest in a Section 529 plan, request the plan's official statement from your Financial Solutions Advisor and read it carefully. The official statement contains more complete information, including investment objectives, charges, expenses and risks of investing in the 529 plan, which you should consider carefully before investing. You should also consider whether your home state or your beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's 529 plan. Section 529 plans are not guaranteed by any state or federal agency.


Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state or local tax penalties. Neither Merrill Edge nor its Financial Solutions Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.

1 Qualifications:

To qualify for this offer, you must open a NextGen College Investing Plan Account and fund the account with at least $5,000 in cash within 30 calendar days of account opening. The balance must be held in the account for a minimum of 90 consecutive days following the funding date.

Definition and Rules regarding $50 Bonus:

The $50 bonus is a one-time credit that will be applied to the newly opened NextGen College Investing Plan Account after the relevant qualification criteria are met. The $50 bonus will be paid during the calendar month after which the 90-day funding criteria are met; only one bonus per account. The $50 bonus will be applied to your account and invested in the various securities offered by the Plan based on your new-investment allocation in effect on the date that the bonus is provided.

Merrill Edge reserves the right to change or cancel this offer at any time. Merrill Edge does not provide legal or tax advice. Please consult a legal or tax advisor regarding your individual circumstances.

2 To be eligible for favorable tax treatment afforded to any earnings portion of withdrawals from Section 529 accounts, such withdrawals must be used for "qualified higher education expenses," as defined in the Internal Revenue Code. Any earnings withdrawn that are not used for such expenses are subject to federal income tax and may be subject to a 10% additional federal tax, as well as applicable state and local income taxes.

3 Section 529 plans are established by various states and are offered to residents of all states. Depending on the laws of the customer's home state, favorable tax treatment for investing in a Section 529 plan may be limited to investments made in a Section 529 plan offered by the customer's home state. Neither Merrill Lynch, Pierce, Fenner & Smith Incorporated nor any of its subsidiaries are tax or legal advisors. We suggest you consult your personal tax or legal advisor before making tax or legal-related investment decisions.

4 For 2013, individuals can gift up to $70,000 ($140,000 for married couples filing jointly) per beneficiary in a single year without incurring gift tax. Contributions between $14,000 and $70,000 ($28,000 and $140,000 for married couples filing jointly) made in one year can be prorated over a five-year period without subjecting you to gift tax or reducing your federal unified estate and gift tax credit. If you contribute less than the $70,000 ($140,000 for married couples filing jointly) maximum, additional contributions can be made without you being subject to federal gift tax, up to a prorated level of $14,000 ($28,000 for married couples filing jointly) per year. Gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given beneficiary in the year of contribution. For contributions between $14,000 and $70,000 ($28,000 and $140,000 for married couples filing jointly) made in one year, if the account owner dies before the end of the five-year period, a prorated portion of the contribution may be included in his or her estate for estate tax purposes.

5 Financial aid rules may change, and the rules in effect at the time the beneficiary applies may be different. For more complete information visit the Department of Education Web site at www.ed.gov.

6 The account owner can change the beneficiary to another member of the family of the original beneficiary, without penalty. Please refer to the Internal Revenue Code definition of "member of the family." If assets are contributed from an UGMA/UTMA account, the custodian may not change the designated minor, except as permitted by applicable law.

7 Institutions must be eligible to participate in federal financial aid programs. Some foreign institutions are also eligible.

8 The beneficiary must be attending an accredited institution at least half time for room and board to be considered an eligible expense.

9 The 10% additional tax does not apply to withdrawals as a result of the designated beneficiary receiving a scholarship or the designated beneficiary's attendance at a U.S. military academy provided the withdrawals do not exceed the amount of the scholarship or value of attendance at the academy. The 10% additional tax also does not apply as a result of withdrawals made due to the death or disability of the designated beneficiary.

10 The portion of the underlying deposits in the Bank Deposit Account that is attributable to the Units held by a Participant in the NextGen Savings Portfolio or the Principal Plus Portfolio is (a) eligible for FDIC insurance coverage of up to $250,000 per Participant (calculated on a basis which aggregates that portion of the underlying deposits attributable to the Units held by the Participant in the NextGen Savings Portfolio or the Principal Plus Portfolio with all FDIC-insured assets held by the Participant at the Bank) and (b) for purposes of FDIC insurance coverage only, considered to be held in the same ownership capacity as a Participant's other single ownership accounts held at the Bank. However, neither Units of the NextGen Savings Portfolio nor the Principal Plus Portfolio are insured or guaranteed by the FDIC or any other agency of state or federal government, FAME, the Bank or the Program Manager, nor does a Participant have a direct beneficial interest or the rights of an owner in the underlying deposits in the Bank Deposit Account. Participants are responsible for monitoring the aggregated value of the portion of the underlying deposits of the NextGen Savings Portfolio or the Principal Plus Portfolio attributable to the Units of such Portfolios held by a Participant plus their other deposits held directly with the Bank, for purposes of the $250,000 FDIC insurance coverage limit. The percentage of the Principal Plus Portfolio that is invested in the Bank Deposit Account as of the end of each month will be posted on www.nextgenplan.com/performance within ten business days of month-end. Deposits held in different ownership capacities, as provided in the FDIC rules, are insured separately. UGMA/UTMA Accounts are generally treated as assets of the Designated Beneficiary, and other types of trust Accounts may be treated as assets of the trustee, for purposes of the FDIC limit. Custodians of UGMA/UTMA Accounts and trustees of trust Accounts should consider how these assets will be treated for purposes of the FDIC limit. For more information, please visit www.fdic.gov. Capitalized terms used in this paragraph are defined in the NextGen College Investing Plan Program Description.