Plan funds can be used for colleges and universities both within California and around the U.S. TIAA-CREF Tuition Financing, Inc. is proud to have been selected by the state of California as the Plan Manager for the ScholarShare plan.
*ScholarShare has received a Silver rating from Morningstar, making it one of the best-rated plans in the nation. In an annual review (10/25/2016) of the largest 529 college savings plans (64 total), Morningstar identified 29 plans that rose above their typical peers, awarding those plans Gold, Silver, and Bronze Morningstar Analyst Ratings for 2016. These forward-looking, qualitative ratings signal Morningstar's conviction in the plans' abilities to outperform their relevant benchmark and peer groups on a risk-adjusted basis over the long term. Morningstar evaluates college savings plans based on five key pillars — Process, Performance, People, Parent, and Price. For more information about Morningstar’s overview of ScholarShare, go to 529.morningstar.com. Past performance does not predict future results. Source: 529.morningstar.com
Learn about the benefits and tax advantages of the ScholarShare College Savings Plan below. Or, if you would prefer to compare ScholarShare and other out-of-state plans, click here.
Whether your beneficiary decides to go to a private or public college or university, in-state or out-of-state, trade or graduate school, funds in the account may be used at any eligible higher educational institution in the nation and many abroad.
Many families hope to see their child or loved one graduate from college someday, but it takes more than hope. The ScholarShare 529 College Savings Plan is a 529 plan that can help your family get there.
Investing in education is a smart move and the tax advantages built into ScholarShare can make it an important part of your overall college funding strategy:
As a 529 Plan, ScholarShare offers income tax benefits. Although contributions are not deductible on your federal tax return, any investment earnings can grow tax-deferred, and distributions to pay for the beneficiary’s college costs come out federally tax-free.
In addition to federal tax benefits, there are state tax benefits as well. For ScholarShare, tax treatment is as follows:
While contributions are not deductible for California income tax purposes, earnings accrue free of state income tax. Qualified Withdrawals and any outgoing rollovers free from federal income tax are also free from California income tax. California tax benefits related to ScholarShare are available only to California tax payers. You should talk to a qualified advisor about how California tax provisions affect your circumstances.
Contributions to ScholarShare may reduce the taxable value of your estate. For example, contributions to ScholarShare, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $15,000 per donor ($30,000 for married contributors), per beneficiary. If an account owner’s contribution to a ScholarShare account for a beneficiary in a single year exceeds $15,000 ($30,000 for married contributors), the account owner may elect to treat up to $75,000 of the contributions, or $150,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion. Consult your tax advisor.
An annual asset-based management fee will be paid to TIAA-CREF Tuition Financing, Inc. to cover the cost of investment management and administrative services.
The total annual asset-based fee for each Investment Option ranges from 0.08% to 0.57% (excluding the Principal Plus Interest Option), which includes a program management fee, a board administrative fee and investment management fees of the underlying funds.
Please note that the State of California reserves the right to change the current fee and impose new or additional fees, expenses, charges or penalties in the future.
You can also download your comparison information as a PDF for future reference.
ScholarShare offers a choice of 19 Investment Portfolios so you can choose a portfolio or a combination of portfolios that best suit your needs.
You have many ways to contribute and convenient ways to enroll. The minimum initial contribution is $25. The minimum subsequent contribution to an account is $25. However, if your employer allows payroll deduction, the minimum subsequent contribution to your account may be as low as $15 per pay period. The minimum contribution for subsequent contributions will be waived at this time, but may be re-instated at any point in the future.
There are no income limitations.
There is no annual limit on the amount you may contribute. However, there is an overall maximum account balance limit of $475,000, which applies to all accounts opened for a beneficiary. An account owner may contribute to a beneficiary’s account if, at the time of the contribution, the total balance of all accounts for that beneficiary does not exceed $475,000. Accounts that have reached the maximum account balance limit may continue to accrue earnings.
TIAA-CREF Tuition Financing, Inc., is an affiliate of TIAA, a financial services organization with nearly 100 years of investment experience.
TIAA was originally started by Andrew Carnegie as a non-profit organization to provide retirement options for teachers. Today TIAA has grown into a full-service financial services organization, but education remains the cornerstone in our legacy.
To open an account, you will need to gather some basic information for both you and your 529 college savings plan beneficiary. Then, you will be taken to the website of your plan provider to complete the enrollment process.
You will need the following information:
Date of birth
Social security or tax identification number
Date of birth
Social security or tax identification number
Consider the investment objectives, risks, charges and expenses before investing in the ScholarShare College Savings Plan. Please visit ScholarShare.com for a Plan Disclosure Booklet with this and more information. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss.
Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits such as financial aid, scholarship funds or protection from creditors only available if you invest in that state’s 529 plan.
The TIAA group of companies does not provide legal or tax advice. Please consult your legal or tax advisor. Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax. Non-qualified withdrawals may also be subject to an additional 2.5% California tax on earnings.
TIAA-CREF Tuition Financing, Inc.(TFI), Program Manager. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA and SIPC, distributor and underwriter for the Scholarshare College Savings Plan.
Neither TIAA-CREF Tuition Financing, Inc., nor its affiliates, are responsible for the content found on any external website links contained herein.
Building a 529 Plan account that is right for you takes planning. The ScholarShare 529 College Savings Plan offers you a choice of 19 Investment Portfolios. These choices vary in their investment strategy and degree of risk, allowing you to select an investment portfolio or combination of investment portfolios that may fit your needs.
For more information on the risks involved in investing in such investment portfolios, and the type of investor for whom each investment portfolio may be appropriate, read the Disclosure Booklet (PDF).
Once you invest in a particular investment portfolio, you can transfer contributions and any earnings to another investment portfolio only twice per calendar year or upon a transfer of funds to a ScholarShare 529 College Savings Plan account for a different beneficiary.
Periodically Review Your Investments
It’s a good idea to periodically re-evaluate your investment strategy as your goals, investment horizon, and personal situation change - for example, annually at tax time, on a yearly basis if your income changes, or upon the birth of another child.
The age-based investment portfolios seek to match the investment objective and level of risk to the investment time horizon by taking into account the beneficiary’s current age and the number of years before the beneficiary turns 18 or is expected to start college. The risk level automatically shifts from aggressive to conservative as the beneficiary ages. This option is good for people who want a simple, all-in-one option.
This investment portfolio seeks to preserve capital and provide a stable return. These options may be good for shorter timeframes to save and for individuals who have lower risk tolerance.
These investment portfolios seek to provide investment portfolios for participants who prefer to select an investment portfolio for its specific asset allocation. Each multi-fund investment portfolio is allocated to multiple underlying funds and/or a funding agreement and has a different investment objective and investment strategy. The allocations in the multi-fund investment portfolios do not change automatically as the beneficiary ages as they do in the Age-Based Investment Portfolios.
These investment portfolios are each invested solely in either shares of a single Underlying Fund or a Funding Agreement. For those investment portfolios invested in an Underlying Fund, their performance is entirely reliant on the performance of that Underlying Fund and may be more volatile than the age-based investment portfolios or the multi-fund investment portfolios. You should be aware that participants do not own shares of the underlying funds directly. This option may be good for people who are interested in specific single funds such as equity index, money market or social fund options.
The AARP College Savings Solutions from TIAA is provided by TIAA not AARP or its affiliates. TIAA pays a royalty fee to AARP for the use of its intellectual property. These fees are used for the general purposes of AARP. AARP does not employ or endorse TIAA associates. Please contact TIAA directly for details.
That’s not all. We’re a leading manager of retirement plans, committed to the financial well-being of all our customers since 1918. With today’s economic climate, people and institutions are looking for a trusted firm they can rely on for a unique combination of advantages. At TIAA, we make you feel good about your financial well-being. For almost 100 years, we’ve been listening to you, advising you, and helping you feel confident about making financial decisions for now and for the future.
TIAA-CREF Tuition Financing, Inc. (TFI) is a leading provider of services to state 529 college savings plans and currently acts as Plan Manager for 9 college savings plans across the country. TFI is an indirect wholly owned subsidiary of TIAA.
College costs are rising. TIAA managed college savings plans can help families prepare for college. We’re a leader in helping the academic, medical, cultural, governmental and research fields plan for retirement and life’s other goals.
TIAA-CREF Individual & Institutional Services, LLC, member FINRA is distributor and underwriter for the plans managed by TIAA-CREF Tuition Financing, Inc.
Our team of TIAA College Savings Consultants is available to answer all of your questions as you consider and compare 529 college savings plans.
The biggest benefit of 529 plan accounts is that they can provide sizable tax advantages. At the federal level, your contributions can grow tax free. When you withdraw the money to pay for your child’s or loved one’s qualified college expenses, you pay no taxes on any earnings. There are no tax forms to bother with until you start making withdrawals.
The same is true at the state level: 529 plan accounts incur no state taxes while the account balance grows or when you make qualified withdrawals. A number of states also let you deduct your annual contribution against your income, potentially lowering your state tax bill. Every state plan is different, so be sure to evaluate the benefits of the plan in your state. You can purchase a 529 savings plan from any state and use it in any state.