529 Pennsylvania College Savings Plan
The Pennsylvania 529 College Savings Plan is sponsored by the Commonwealth of Pennsylvania and administered by the Treasury Department. Upromise Investment Advisers, LLC is the servicing manager of the funds and Vanguard is the investment manager. Pennsylvania offers two different 529 plans, the Pennsylvania 529 Guaranteed Savings Plan (GSP) and the Pennsylvania 529 Investment Plan
The Pennsylvania 529 Guaranteed Savings Plan (GSP) allows your investment to keep up with the rate of college tuition inflation. As you know, college tuitions have been going through the roof over the past twenty years or so, increasing at a rate far greater than inflation. But, with the GSP, when it's time to use your investment for college expenses, even if your account value hasn't kept up with inflation, the GSP Fund is obligated to pay for your college expenses at the tuition-increased value. This has been a big winner for thousands of investors over the last few years.
The PA 529 Investment Plan offers 13 investment options, including three aged based, ranging from very conservative to very aggressive. Unlike the GSP, this Pennsylvania 529 Plan does not guarantee your investments and your account value can move up or down depending on the direction of the markets. The three age-based options are conservative, moderate and aggressive. These funds will move your money from aggressive while the beneficiary is young towards more conservative as college age approaches. If you prefer to maintain control over your investments, there are ten options for you, even including a socially responsible portfolio. Money invested in these portfolios remains until moved by the account owner.
In the Pennsylvania 529 Plans, your investments grow federal and state tax-deferred. Additionally, 529 owners who are Pennsylvania taxpayers will be able to deduct up to $13,000 per beneficiary per year ($26,000 for married couples filing jointly) from their Pennsylvania State income tax return. Withdrawals made for qualified college expenses are also Federal and state tax free.
There are many benefits to a PA 529 Plan are:
* Begin with as little as a $25 deposit and add as little as $15 if paying through a payroll deduction.