For a comparison between 529 Plans and other ways to save for college, click on a question to view the answers in the comparison table.
How are account assets and contributions taxed? Who controls the account? How much can you contribute? Are there income restrictions?		What are the restrictions to using the money? What are the penalties for nonqualified withdrawals? What is the impact on your financial aid application? Can you rollover an existing account into a Pacific Life Funds 529 Plan?
Answers Pacific Life Funds 529 College Savings Plan Coverdell Education Savings Account (ESA) (Formerly the Education IRA) UGMA/UTMA Prepaid Tuition Plan Brokerage Account   Series EE & I Savings Bonds   Select a question. How are account assets and contributions taxed? Pacific Life Funds 529 College Savings Plan Tax-free growth potential; tax-free qualified withdrawals Gift contributions are treated as a completed gift. - $12,000 annual exclusion, or up to $60,000 with a five-year election Contribution value is removed from gross estate if contributor lives during the five year election period Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Tax-free growth potential; tax-free qualified withdrawals - Must be used by the time the beneficiary is age 30 Gift contributions are treated as a completed gift. Contribution value is removed from gross estate UGMA/UTMA Earnings and gains are generally taxed at beneficiary's rate Transfers are treated as a completed gift Can use the $12,000 annual exclusion Value is included in custodian's gross estate if donor and custodian are the same Prepaid Tuition Plan Tax-free growth potential, tax-free qualified withdrawals Brokerage Account Earnings are taxed at investor's rate - Capital gains tax due when sold No gift involved Value is included in the account owner's gross estate Series EE & I Savings Bonds Tax-free interest if used for qualified education expenses No gift options as bonds are owned by the parent Value is included in bondholder's gross estate Select a question. Who controls the account? Pacific Life Funds 529 College Savings Plan Account Owner Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Parent or Guardian UGMA/UTMA Custodian of the account until beneficiary reaches the age of majority (18 or 21 based on state law), then the beneficiary Prepaid Tuition Plan Account Owner Brokerage Account Registered Owner Series EE & I Savings Bonds Bond Owner Select a question. How much can you contribute? Pacific Life Funds 529 College Savings Plan Up to a combined account balance of $338,000 (contributions and earnings) per beneficiary; balance may increase annually if the cost of higher education increases Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Up to $2,000 annually per beneficiary under age 18 UGMA/UTMA Unlimited (subject to maximums of underlying investment) Prepaid Tuition Plan Varies by state Brokerage Account Unlimited (subject to maximums of underlying investment) Series EE & I Savings Bonds Unlimited (subject to maximums of underlying investment) Select a question. Are there income restrictions? Pacific Life Funds 529 College Savings Plan No Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Not available to high-income families. Benefits are phased out for Modified Adjusted Gross Income (MAGI) at $110,000 (single) and $220,000 (joint) UGMA/UTMA No Prepaid Tuition Plan No Brokerage Account No Series EE & I Savings Bonds Tax benefits may begin phase out for Modified Adjusted Gross Income (MAGI) at $59,850 (single) and $89,750 (joint) Select a question. What are the restrictions to using the money? Pacific Life Funds 529 College Savings Plan Can be used at any eligible college or university Tax-free withdrawals must be used for qualified higher education expenses (tuition, books, fees, qualified room and board) Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Withdrawals must be used for qualified higher education expenses Can be used for primary (K-12) school expenses UGMA/UTMA Must be used for the benefit of the beneficiary only Cannot change the beneficiary once established Prepaid Tuition Plan Can be used at an eligible college or university, usually in-state Tax-free withdrawals must be used for qualified higher education expenses Brokerage Account No Restrictions Series EE & I Savings Bonds Tax-free if used for educational expenses (based on MAGI limits), otherwise taxable Select a question. What are the penalties for nonqualified withdrawals? Pacific Life Funds 529 College Savings Plan Withdrawal of earnings are taxed at ordinary income rate, plus a 10% federal tax penalty Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Earnings are taxable at ordinary income tax rate and are subject to a 10% federal tax penalty UGMA/UTMA Not applicable Prepaid Tuition Plan Earnings are taxable at ordinary income tax rate and are subject to a 10% federal tax penalty Brokerage Account Not applicable Series EE & I Savings Bonds Not applicable Select a question. What is the impact on your financial aid application? Pacific Life Funds 529 College Savings Plan Assets are considered the account owner's, not the beneficiary's Penalty-free withdrawals if the student receives a scholarship Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Assets are considered the beneficiary's UGMA/UTMA Assets are considered the beneficiary's Prepaid Tuition Plan Withdrawals reduce need on a dollar-for-dollar basis Brokerage Account Assets are considered the registered account owner's Series EE & I Savings Bonds Assets are considered the bond holder's Select a question. Can you rollover an existing account into a Pacific Life Funds 529 Plan? Pacific Life Funds 529 College Savings Plan Yes; limited to one rollover for the same beneficiary in a 12 month period Coverdell Education Savings Account (ESA) (Formerly the Education IRA) Yes UGMA/UTMA Yes — however, the child will be both the account owner and the beneficiary for the life of the account Prepaid Tuition Plan Yes Brokerage Account No Series EE & I Savings Bonds Yes Select a question.

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