Alabama 529 Plan
Alabama offers two 529 college savings plans. One is a tradition 529 savings plan called Alabama Higher Education Fund and the
other is a pre-paid tuition plan called Prepaid Affordable College Tuition Program (PACT).
Alabama Higher Education Fund 529 Plan
The Alabama Higher Education Fund is a traditional 529 plan that allows you to invest money today and reap tax benefits when you withdraw it
to pay for qualified education expenses.
Type: Direct and Advisor sold - this Alabama 529 plan can be purchased directly from the state or through a local financial advisor.
Fund Family: Van Kampen Investments
Minimums: To get started you can deposit $250 or set up a monthly payment plan of only $50. The minimum subsequent
contribution to Alabama's 529 plan is $50.
Maximum Contributions: Currently, you can contribute up to $300,000 to your Alabama 529 plan. Of course, your
total amount in the plan can be higher as your investments group. 529 plans typically increase the contribution limit over time, so you may
be able to contribute more.
Tax Benefits: Good news for Alabama residents -- by investing in your state's 529 plan, you don't pay Alabama state
taxes on qualified withdrawals and earnings. You also get the same benefit for federal income taxes. Out-of-state participants
still get the federal tax benefits.
Residency: The Alabama Higher Education Fund 529 plan is open to all United States residents, not just those in Alabama.
You can learn more about the Alabama 529 plan at the official web site.
Prepaid Affordable College Tuition Program (PACT)
Alabama also offers a pre-paid tuition plan that lets you lock in today's rates for college. It can be used to pay for in-state public
colleges as well as private and out-of-state colleges. However, private and out-of-state college expenses will be prorated and may not be
fully covered.
For more information about PACT, visit the official web site.
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