The 529 Plan is specifically for college savings and cannot be used towards pre-college tuition. The Coverdale Education IRA is an education savings plan which may be applied towards any pre-college tuition expenses. Below is a comparison chart of the various types of plans that are available for education purposes. FB Financial Services Investment officers can help you determine the plan that best fits your situation.

Income Limits
529 College Savings	No limits. Anyone can contribute.
Coverdell Education Savings Account	Ability to contribute is phased out for married couples with incomes between $190,000 and $220,000 and for individuals with incomes between $95,000 and $110,000.*
UGMA/UTMA	None
Parents' investment account	None
Contribution Limits
529 College Savings	$250,000 per beneficiary.
Coverdell Education Savings Account	$2,000 per year per beneficiary, also called the recipient.*
UGMA/UTMA	None
Parents' investment account	None
Income Tax Treatment
529 College Savings	Earnings can grow free from federal tax, and withdrawals for qualified higher education expenses are free from federal tax.*
Coverdell Education Savings Account	Earnings can grow free from tax, and withdrawals for qualified elementary, secondary1 and higher education expenses are free from federal tax.
UGMA/UTMA	For children under 14, the first $800 of earnings is tax-free. Earnings between $800 and $1,600 are taxed at the child's rate; earnings above $1,600 are taxed at the parents' rate. All earnings for children over 14 are taxed at the child's rate.
Parents' investment account	Dividends and interest are taxed to owner at applicable rates, and capital gains are taxed at capital gain rates.
Control
529 College Savings	Owner maintains control of the assets, decides when withdrawals will be made and can change the beneficiary.
Coverdell Education Savings Account	Beneficiary, also called the recipient, may assume control at age of majority, 18 or 21 in most states.
UGMA/UTMA	Beneficiary assumes control at age of majority, 18 or 21 in most states.
Parents' investment account	Owner maintains control of the assets and decides when withdrawals will be made
Investment Flexibility
529 College Savings	You can move your assets among funds once each calendar year or when you change the benefi
Coverdell Education Savings Account	You can move your assets as often as you want.
UGMA/UTMA	You can move your assets as often as you want, but each transfer usually is a taxable event.
Parents' investment account	You can move your assets as often as you want, but each transfer usually is a taxable event.
Uses
529 College Savings	Higher education expenses, such as tuition, books and room and board.
Coverdell Education Savings Account	Educational expenses, including tuition, books and room and board for kindergarten through high school,* college and graduate school.
UGMA/UTMA	Any use that benefits the child.
Parents' investment account	Any use.
American Funds Investment Options
529 College Savings	CollegeAmerica offers 21 American Funds in five share classes.
Coverdell Education Savings Account	22 American Funds.
UGMA/UTMA	All 29 American Funds.
Parents' investment account	All 29 American Funds.
Ability to Change Beneficiaries
529 College Savings	Yes
Coverdell Education Savings Account	Yes
UGMA/UTMA	No
Parents' investment account	Not applicable
Penalties on Non-qualified Withdrawals
529 College Savings	Ordinary income taxes and a 10% federal tax penalty on earnings.
Coverdell Education Savings Account	Ordinary income taxes and a 10% federal tax penalty on earnings.
UGMA/UTMA	Not applicable
Parents' investment account	Not applicable
Contribution Deductible from State Taxes
529 College Savings	Only to the residents of the sponsoring plan.
Coverdell Education Savings Account	No
UGMA/UTMA	No
Parents' investment account	No

* This tax benefit is effective through 2010 unless extended by Congress. Tax issues for 529 college savings plans can be complicated. Talk to your tax adviser.

Benefits of 529 College Savings Plan:

Tax-free Growth

• Investments grow tax free for as long as the money stays in the plan
• Qualified expenses are tax free at the federal level

• Donor stays in control of the account
• Child has no rights to the funds
• More control and flexibility than UTMA/UGMA and Coverdell
• No income limits, no age limits, and the ability to change the beneficiary

• Very easy, hands-off way to save for college with age-based portfolios and static portfolios
• Professionally managed plan assets

• Qualifies for the $11,000 annual gift tax exclusion ($22,000 for married couples)
• One-time contribution of $55,000 can be stretched over a five-calendar-year period ($110,000 for married couples)
  Note: Lump sum contribution of $55,000 for singles and $110,000 for married couples restricts contributions for five years after the contribution.
• Assets leave your estate but don't leave your control

Take advantage of tax benefits
The tax benefits offered by college savings vehicles can greatly affect how much you accumulate for a child's college education. Tax-free status is a powerful benefit and can make a difference in the value of an account -- enabling your college savings dollars to be used towards college education expenses.

Know how flexible and accessible the assets are
What happens to your college savings if their situation changes, they have a financial emergency, or if your child receives a scholarship? The answers vary based on the college savings vehicle they chose. Ownership, control of assets, and account flexibility are important factors that should weigh in to the decision-making process. College savings plans also vary in the treatment of non-qualified withdrawals, from not allowing early access to complete penalty-free liquidity.

Understand financial aid implications
Many families are afraid to save for college, thinking it will hurt their chances for financial assistance. It is income, not savings, is the most important factor in determining who qualifies for educational grants and/or loans. Since parent income and the saved assets of both child and parent are important factors in determining financial aid, it's important to consider how the college savings vehicle chosen affects financial aid.

Consider income restrictions, contribution limits, and other factors
With the rising cost of college, it's important to start investing early and regularly to prepare financially for college. High contribution limits allow clients to save greater amounts towards college expenses, and income restrictions often dictate who can use each plan.

Our Investment Officers will explain the various plans and help you choose the right one for your family.

Email: fbfin.serv@uvestmail.com
Call: (800) 400-7067

Under a "sunset provision", the tax exemption for earnings on qualified withdrawals is scheduled to expire on December 31, 2010, unless extended by Congress. As with all tax-related decisions, consult your tax advisor. Withdrawals for expenses other than qualified education expenses are subject to income tax and an additional 10% penalty on earnings. You should consider a 529 Plan's fees and expenses such as administrative fees, enrollment fees, annual maintenance fees, sales charges, and underlying fund expenses, which will fluctuate depending on the 529 Plan invested in and the investments chosen within the plan. You should also consider the inherent risks associated with investing in 529 Plans such as investment return and principal fluctuation, which will also vary based on the investments made within the plan. This and other important information is contained in the issuer's official statement. The official statement should be read carefully before investing. Securities are offered by, and Investment Consultants are registered with UVEST Financial Services, Member FINRA www.finra.org /SIPC www.sipc.org. UVEST and FB Financial Services are independent entities.

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Not Guaranteed by any Government Agency Not a Bank Deposit