Business Building Strategies

If you are not offering 529 college savings plans to your clients someone else will. Qualified withdrawals are federal tax free as long as they are used for higher education expenses. However, nonqualified withdrawals are still subject to both income taxes and a 10% federal tax penalty.

Focus your business growth on the rapidly expanding 529 market with the following marketing opportunities.

Every one of your clients is a 529 prospect
Great gifting opportunities

Every one of your clients could be a 529 prospect
Parents, grandparents, aunts, uncles, family friends, and your 401(k) corporate clients are all ideal 529 prospects. Here are a few opening lines to use with each specific 529 target audience.

Parents of young children
Q. Can you afford to retire and send your kids to college?

A. Consider an easy and convenient way to save and plan for college today, so you may not have to take a chunk out of your retirement savings later on, when you are nearing retirement, to pay for college costs. It’s called the MFS 529 Savings Plan.

Q. Want to pay less estate tax and also help your grandkids pay for college?

A. The MFS 529 Savings Plan can help you to do just that.

Aunts, uncles, family friends
Q. Want a simple and easy gift idea?

A. The MFS 529 Savings Plan is an easy way for you to invest in the future of a child. You can benefit from the unique gifting feature of the 529 plan. Open an account for $250 or more. There is no minimum for additional contributions for birthdays and other special occasions.

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Great gifting opportunities
During year-end gifting season, don’t miss the opportunity to let clients know about the unique gifting and estate tax benefits of 529 plans. Not only is it smart for college investing, but it could make sense for tax management too.

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

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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 home office. Investments in 529 plans involve investment risks. You should consider your clients 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 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.