Image of college students wearing mortarboards at a graduation ceremony, as seen from behind.

529 Savings Plan for Individuals

A 529 College Saving plan investment can help with the cost of a higher education.

Overview

The MFS 529 Savings Plan was designed to offer a wide range of investment choices, gifting and estate tax benefits, as well as quality service. And, of course, the investment management expertise of MFS Investment Management.

Tax Advantages

One of the key features of 529 college savings plans is tax advantages.

  • Earnings are tax deferred and, if used for qualified higher education, expenses are not subject to federal income tax. Withdrawals not used for qualified higher education expenses are subject to both income taxes and a 10% federal tax penalty on earnings. State taxes may also apply.
  • An individual can contribute as much as $14,000 each year ($28,000 for married couples) without gift-tax consequences as of 2017.
  • Under a special election, up to $70,000 ($140,000 for married couples) can be contributed at one time by accelerating five years’ worth of contributions (as gifts) as of 2017. This feature makes it an attractive estate planning tool for many. The account owner will not incur federal gift taxes as long as he/she does not make additional gifts to the same designated beneficiary for four years after the year in which the accelerated five-year gift has been made. In order to do this, the account owner must make an election on a federal gift tax return for the year of the contribution. However, if the account owner elected to treat the gifts as having been made over a five-year period and dies before the end of the five-year period, the portion of the contribution allocable to the remaining years in the five-year period would be includable in computing the account owner’s gross estate for federal estate tax purposes. Account owners should see their tax advisors for more information regarding the gift and estate tax consequences of opening an account.
 

MFS 529 Savings Plan

UGMA/UTMA

Income Tax Treatment

Withdrawals are federal tax free if used for qualified higher education expenses.

Earnings are taxed at the beneficiary’s rate.

Contribution Limits

Up to $310,000 account balance per beneficiary

None

Income Limits

No limits

No limits

Control of Assets

Account owner

Custodian until child reaches majority; then the child

Investment Flexibility

You can move assets among funds twice each calendar year or when you change beneficiaries.

You can move assets as often as you want, but each transfer usually is a taxable event.

Estate Planning Features

Assets are transferred out of the owner’s estate. The owner retains control.

Assets are transferred out of the estate.

Uses

Can be used for almost any accredited post-secondary school

No restrictions

Ability to Change Beneficiaries

Can be transferred to another member of the same family without penalty

Not permitted

Penalties on Nonqualified Withdrawals

Ordinary income taxes and a 10% IRS penalty on earnings

None

State Tax Deduction

$2,330 per individual ($4,660 for married couples filing jointly) — Oregon taxpayers only*

No

Annual Fee

$25 annual fee, waived for accounts valued over $25,000 and for residents of Oregon†

Differs, depending upon funding vehicle

* Oregon taxpayers may be eligible for a state tax deduction from Oregon taxable income for contributions to the MFS 529 Savings Plan. For 2016, the limit is $2,330 if single or married and filing separately, or $4,660 if married and filing jointly. These deduction limits will be adjusted for inflation by the Oregon Department of Revenue. Learn more at www.oregon529network.com.

† Other waivers may apply, check with your financial advisor.

Investment Options

An MFS 529 Savings Plan offers a variety of investment choices, as well as three investment paths.

1. Age-based investment option
When you select an age-based investment approach, you don’t have to worry about switching to a more conservative portfolio as the child approaches college age. Assets are automatically transferred to a more conservative asset allocation fund as he or she approaches college age. This option transfers assets among five MFS asset allocation funds designed to account for the approximate number of years before your beneficiary starts college. Then, during the college years, assets are placed in a conservative bond fund (MFS Lifetime Income Fund). Automatic exchanges take place on the quarterly exchange date on or following the beneficiary’s fourth, ninth, thirteenth, fifteenth, and seventeenth birthdays. The funds' objectives and investment strategies change from one age-based model to another, and the principal value of the fund options are not guaranteed at any time.


2. Built-in allocation approach
The built-in allocation approach simplifies the decision process by offering preassembled asset allocation funds. Asset allocation investment options offer targeted asset mixes to match investors’ varying objectives and risk tolerance and are rebalanced periodically.


Funds are listed relative to one another within the MFS funds and are not meant to be compared with other portfolios or other types of investments. The three major factors taken into account when listing the portfolios from less aggressive to more aggressive are historical volatility, types of securities in the fund, and diversification permitted within the fund. See the prospectus for detailed explanations and each fund’s objective, policies, strategies, permitted investments, and risks. The investments you choose should correspond to your financial needs, goals, and risk tolerance. Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested. For assistance in determining your financial situation, please consult an investment professional. Diversification does not guarantee a profit or protect against a loss .

Assets Flexibility & Control

MFS 529 Savings Plan makes it easy and affordable to invest for college because of its flexible features such as low minimum initial and subsequent investments, high maximum contribution, and a systematic investment program.

  • $250 minimum initial investment
  • No minimum for additional contributions
  • Contributions accepted until account balance reaches $310,000, per beneficiary
  • The MFS Automatic Exchange Plan enables you to dollar-cost average from any MFS fund into any MFS 529 Savings Plan investment options
  • Contributions and earnings can be reallocated among MFS fund options twice a year, or upon a beneficiary change
  • $25 annual account fee; waived for accounts with assets of $25,000 or more, as well as for Oregon residents. Other waivers may apply, check with your financial advisor

Owner keeps control of assets

  • The person who establishes the account retains control of the assets
  • The person who establishes the account may choose to change the beneficiary

Gifting & Estate Planning

  1. Owner may gift $14,000 per beneficiary ($28,000 per married couple) per year without paying federal gift tax as of 2017.

  2. Under a special election, up to $70,000 ($140,000 for married couples) can be contributed at one time by accelerating five years’ worth of contributions (as gifts) as of 2017. This feature makes it an attractive estate planning tool for many. Account owner will not incur federal gift taxes as long as he/she does not make any additional gifts to the same designated beneficiary for four years after the year during which he/she makes the accelerated five-year gift. In order to do this, the account owner must make an election on a federal gift tax return for the year of the contribution. However, if the account owner elected to treat the gifts as having been made over a five-year period and dies before the end of the five-year period, the portion of the contribution allocable to the remaining years in the five-year period would be includable in computing the account owner’s gross estate for federal estate tax purposes. Account owners should see their tax advisors for more information regarding the gift and estate tax consequences of opening an account.

The MFS 529 Savings Plan makes it easy to open and maintain a gift of education. For as little as $250 you can open an account, with no minimum for additional contributions. So it’s smart to let family and friends know about the account so they can invest in the child’s future too.

Easy to Open & Maintain

Once you’ve decided that an MFS 529 Savings Plan is right for you, talk with your investment professional. He or she will help you choose MFS investment options to fit your needs, as well as assist with the application. When you complete the process, maintaining the account is seamless.

  • Access account information, such as balances and transactions, online anytime via MFS Access
  • Track daily pricing online by fund symbol
  • No minimum for additional contributions
  • Ask a specialist questions on the MFS 529 Savings Plan shareholder hotline, 1-866-529-1637

Oregon Taxpayer Benefits

Oregon taxpayers are eligible for a state tax deduction from Oregon taxable income for contributions to the MFS 529 Savings Plan. For tax year 2017, single contributors qualify for a $2,330 state tax deduction and couples married filing jointly qualify for a $4,660 state tax deduction when they contribute to the MFS 529 Savings Plan. These deduction limits will be adjusted for inflation by the Oregon Department of Revenue.

About the MFS 529 Savings Plan

The MFS 529 Savings Plan is a flexible college investing plan sponsored by the state of Oregon, acting by and through the Oregon 529 Savings Board and is part of the Oregon 529 Savings Network. MFS Fund Distributors, Inc. is the Program Manager. MFS 529 Savings Plan accounts are considered municipal fund securities.

Depending on your state of residence and the state of residence of the beneficiary, an investment in the MFS 529 Savings Plan may not afford you or your beneficiary state tax benefits or other benefits only available for investments in such state's qualified tuition program. See your tax advisor to be sure you understand the tax issues related to a 529 plan. Withdrawals of earnings not used to pay for qualified higher education expenses are subject to an additional 10% federal tax penalty. State taxes may also apply.

There is a $25 annual account fee associated with the MFS 529 Savings Plan. This annual fee is waived for Oregon residents and for those accounts with assets of $25,000 or more. Other waivers may apply, check with your financial advisor. Investments in 529 plans involve investment risks. You should consider your financial needs, goals, and risk tolerance prior to investing.

Before investing in the MFS 529 Savings Plan, consider the investment objectives, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, as well as a Participant Agreement and Disclosure Statement and Expense Supplement, contact MFS or view online at mfs.com. Read it carefully.

MFS does not provide legal, tax, or accounting advice. Individuals should not use or rely upon the information provided herein without first consulting with their tax or legal professional about their particular circumstances. Any statement contained in this communication (or elsewhere on this web site) concerning U.S. tax matters was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. This communication was written to support the promotion or marketing of the transaction(s) or matter(s) addressed.

This publication is authorized for distribution only when preceded or accompanied by a prospectus, or summary prospectus, for the portfolio being offered. Consider the fund's investment objectives, risks, charges and expenses. Contact MFS or view online. Read it carefully.

This website is a general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, plan feature or other such purpose. Your use of this website indicates that you agree with the intended purpose. Prior to making any investment or financial decision, you should seek individualized advice from a personal financial, tax, and other professionals who are able to provide advice in the context of your particular financial situation.

  • Overview

    Overview

    The MFS 529 Savings Plan was designed to offer a wide range of investment choices, gifting and estate tax benefits, as well as quality service. And, of course, the investment management expertise of MFS Investment Management.

  • Tax Advantages

    Tax Advantages

    One of the key features of 529 college savings plans is tax advantages.

    • Earnings are tax deferred and, if used for qualified higher education, expenses are not subject to federal income tax. Withdrawals not used for qualified higher education expenses are subject to both income taxes and a 10% federal tax penalty on earnings. State taxes may also apply.
    • An individual can contribute as much as $14,000 each year ($28,000 for married couples) without gift-tax consequences as of 2017.
    • Under a special election, up to $70,000 ($140,000 for married couples) can be contributed at one time by accelerating five years’ worth of contributions (as gifts) as of 2017. This feature makes it an attractive estate planning tool for many. The account owner will not incur federal gift taxes as long as he/she does not make additional gifts to the same designated beneficiary for four years after the year in which the accelerated five-year gift has been made. In order to do this, the account owner must make an election on a federal gift tax return for the year of the contribution. However, if the account owner elected to treat the gifts as having been made over a five-year period and dies before the end of the five-year period, the portion of the contribution allocable to the remaining years in the five-year period would be includable in computing the account owner’s gross estate for federal estate tax purposes. Account owners should see their tax advisors for more information regarding the gift and estate tax consequences of opening an account.
     

    MFS 529 Savings Plan

    UGMA/UTMA

    Income Tax Treatment

    Withdrawals are federal tax free if used for qualified higher education expenses.

    Earnings are taxed at the beneficiary’s rate.

    Contribution Limits

    Up to $310,000 account balance per beneficiary

    None

    Income Limits

    No limits

    No limits

    Control of Assets

    Account owner

    Custodian until child reaches majority; then the child

    Investment Flexibility

    You can move assets among funds twice each calendar year or when you change beneficiaries.

    You can move assets as often as you want, but each transfer usually is a taxable event.

    Estate Planning Features

    Assets are transferred out of the owner’s estate. The owner retains control.

    Assets are transferred out of the estate.

    Uses

    Can be used for almost any accredited post-secondary school

    No restrictions

    Ability to Change Beneficiaries

    Can be transferred to another member of the same family without penalty

    Not permitted

    Penalties on Nonqualified Withdrawals

    Ordinary income taxes and a 10% IRS penalty on earnings

    None

    State Tax Deduction

    $2,330 per individual ($4,660 for married couples filing jointly) — Oregon taxpayers only*

    No

    Annual Fee

    $25 annual fee, waived for accounts valued over $25,000 and for residents of Oregon†

    Differs, depending upon funding vehicle

    * Oregon taxpayers may be eligible for a state tax deduction from Oregon taxable income for contributions to the MFS 529 Savings Plan. For 2016, the limit is $2,330 if single or married and filing separately, or $4,660 if married and filing jointly. These deduction limits will be adjusted for inflation by the Oregon Department of Revenue. Learn more at www.oregon529network.com.

    † Other waivers may apply, check with your financial advisor.

  • Investment Options

    Investment Options

    An MFS 529 Savings Plan offers a variety of investment choices, as well as three investment paths.

    1. Age-based investment option
    When you select an age-based investment approach, you don’t have to worry about switching to a more conservative portfolio as the child approaches college age. Assets are automatically transferred to a more conservative asset allocation fund as he or she approaches college age. This option transfers assets among five MFS asset allocation funds designed to account for the approximate number of years before your beneficiary starts college. Then, during the college years, assets are placed in a conservative bond fund (MFS Lifetime Income Fund). Automatic exchanges take place on the quarterly exchange date on or following the beneficiary’s fourth, ninth, thirteenth, fifteenth, and seventeenth birthdays. The funds' objectives and investment strategies change from one age-based model to another, and the principal value of the fund options are not guaranteed at any time.


    2. Built-in allocation approach
    The built-in allocation approach simplifies the decision process by offering preassembled asset allocation funds. Asset allocation investment options offer targeted asset mixes to match investors’ varying objectives and risk tolerance and are rebalanced periodically.


    Funds are listed relative to one another within the MFS funds and are not meant to be compared with other portfolios or other types of investments. The three major factors taken into account when listing the portfolios from less aggressive to more aggressive are historical volatility, types of securities in the fund, and diversification permitted within the fund. See the prospectus for detailed explanations and each fund’s objective, policies, strategies, permitted investments, and risks. The investments you choose should correspond to your financial needs, goals, and risk tolerance. Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested. For assistance in determining your financial situation, please consult an investment professional. Diversification does not guarantee a profit or protect against a loss .

  • Asset Flexibility & Control

    Assets Flexibility & Control

    MFS 529 Savings Plan makes it easy and affordable to invest for college because of its flexible features such as low minimum initial and subsequent investments, high maximum contribution, and a systematic investment program.

    • $250 minimum initial investment
    • No minimum for additional contributions
    • Contributions accepted until account balance reaches $310,000, per beneficiary
    • The MFS Automatic Exchange Plan enables you to dollar-cost average from any MFS fund into any MFS 529 Savings Plan investment options
    • Contributions and earnings can be reallocated among MFS fund options twice a year, or upon a beneficiary change
    • $25 annual account fee; waived for accounts with assets of $25,000 or more, as well as for Oregon residents. Other waivers may apply, check with your financial advisor

    Owner keeps control of assets

    • The person who establishes the account retains control of the assets
    • The person who establishes the account may choose to change the beneficiary
  • Gifting & Estate Planning

    Gifting & Estate Planning

    1. Owner may gift $14,000 per beneficiary ($28,000 per married couple) per year without paying federal gift tax as of 2017.

    2. Under a special election, up to $70,000 ($140,000 for married couples) can be contributed at one time by accelerating five years’ worth of contributions (as gifts) as of 2017. This feature makes it an attractive estate planning tool for many. Account owner will not incur federal gift taxes as long as he/she does not make any additional gifts to the same designated beneficiary for four years after the year during which he/she makes the accelerated five-year gift. In order to do this, the account owner must make an election on a federal gift tax return for the year of the contribution. However, if the account owner elected to treat the gifts as having been made over a five-year period and dies before the end of the five-year period, the portion of the contribution allocable to the remaining years in the five-year period would be includable in computing the account owner’s gross estate for federal estate tax purposes. Account owners should see their tax advisors for more information regarding the gift and estate tax consequences of opening an account.

    The MFS 529 Savings Plan makes it easy to open and maintain a gift of education. For as little as $250 you can open an account, with no minimum for additional contributions. So it’s smart to let family and friends know about the account so they can invest in the child’s future too.

  • Easy to Open & Maintain

    Easy to Open & Maintain

    Once you’ve decided that an MFS 529 Savings Plan is right for you, talk with your investment professional. He or she will help you choose MFS investment options to fit your needs, as well as assist with the application. When you complete the process, maintaining the account is seamless.

    • Access account information, such as balances and transactions, online anytime via MFS Access
    • Track daily pricing online by fund symbol
    • No minimum for additional contributions
    • Ask a specialist questions on the MFS 529 Savings Plan shareholder hotline, 1-866-529-1637
  • Oregon Taxpayer Benefits

    Oregon Taxpayer Benefits

    Oregon taxpayers are eligible for a state tax deduction from Oregon taxable income for contributions to the MFS 529 Savings Plan. For tax year 2017, single contributors qualify for a $2,330 state tax deduction and couples married filing jointly qualify for a $4,660 state tax deduction when they contribute to the MFS 529 Savings Plan. These deduction limits will be adjusted for inflation by the Oregon Department of Revenue.

    About the MFS 529 Savings Plan

    The MFS 529 Savings Plan is a flexible college investing plan sponsored by the state of Oregon, acting by and through the Oregon 529 Savings Board and is part of the Oregon 529 Savings Network. MFS Fund Distributors, Inc. is the Program Manager. MFS 529 Savings Plan accounts are considered municipal fund securities.

    Depending on your state of residence and the state of residence of the beneficiary, an investment in the MFS 529 Savings Plan may not afford you or your beneficiary state tax benefits or other benefits only available for investments in such state's qualified tuition program. See your tax advisor to be sure you understand the tax issues related to a 529 plan. Withdrawals of earnings not used to pay for qualified higher education expenses are subject to an additional 10% federal tax penalty. State taxes may also apply.

    There is a $25 annual account fee associated with the MFS 529 Savings Plan. This annual fee is waived for Oregon residents and for those accounts with assets of $25,000 or more. Other waivers may apply, check with your financial advisor. Investments in 529 plans involve investment risks. You should consider your financial needs, goals, and risk tolerance prior to investing.

    Before investing in the MFS 529 Savings Plan, consider the investment objectives, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, as well as a Participant Agreement and Disclosure Statement and Expense Supplement, contact MFS or view online at mfs.com. Read it carefully.

    MFS does not provide legal, tax, or accounting advice. Individuals should not use or rely upon the information provided herein without first consulting with their tax or legal professional about their particular circumstances. Any statement contained in this communication (or elsewhere on this web site) concerning U.S. tax matters was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. This communication was written to support the promotion or marketing of the transaction(s) or matter(s) addressed.

    This publication is authorized for distribution only when preceded or accompanied by a prospectus, or summary prospectus, for the portfolio being offered. Consider the fund's investment objectives, risks, charges and expenses. Contact MFS or view online. Read it carefully.

    This website is a general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, plan feature or other such purpose. Your use of this website indicates that you agree with the intended purpose. Prior to making any investment or financial decision, you should seek individualized advice from a personal financial, tax, and other professionals who are able to provide advice in the context of your particular financial situation.

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