NextGen

Why NextGen?

NextGen is a Section 529 plan, designed to help families prepare for college. Any earnings in a Section 529 plan are tax-free¹, when used for qualified higher education expenses. NextGen is Maine’s Section 529 plan and is administered by the Finance Authority of Maine. Merrill Lynch, Pierce, Fenner & Smith Incorporated is the program manager.

NextGen offers many advantages:

Reduce student loans and debt

Every dollar in a NextGen account, when used for qualified higher education expenses1, is a dollar that doesn’t need to be borrowed and repaid with interest.

Tax-free growth

Any earnings in a NextGen account are federal and Maine state income tax-free¹, when used for qualified higher-education expenses.

Account holder control

With a NextGen account, the account owner retains control over the funds in the account. The beneficiary – your child, grandchild, niece, nephew, or anyone else you name – has no access to the assets in the account. Decisions about the account investments and how the funds are used are always in your hands.

Multiple investment choices

NextGen offers multiple investment choices that can help meet your college planning needs.

Flexibility

  • Parents, grandparents or even family friends can open a NextGen account. You can even open a NextGen account for yourself and pursue your own post-secondary education!
  • Assets in a NextGen account may be used at any U.S. accredited post-secondary institution. Accredited institutions are those eligible to participate in federal financial aid programs, and include some foreign institutions.
  • NextGen offers multiple investment choices, and you can move your assets between different investment portfolios, should you find your investment needs change.

Please remember there’s always the potential of losing money when you invest in securities.

Contribution Limits

You can make contributions of as little as $25 a month and currently up to as much as $425,000 for all NextGen accounts for the same beneficiary. Anyone may make contributions to your NextGen account — parents, grandparents, friends or family.

Make It Easy

Once you open a NextGen account, you can arrange to have contributions automatically made to your account from a checking or savings account, or through payroll deduction. Check with your employer to find out if they can process payroll direct deposits.

Why Enroll Now?

If you have been hesitating because there’s not much money to spare, or maybe because college expenses seem too overwhelming or too far in the future to tackle, opening a NextGen account can help. Every dollar in a NextGen account, when used for qualified higher education expenses¹, is a dollar that doesn’t need to be borrowed and repaid with interest.

 

The chart below helps illustrate annual college costs. When you open a NextGen account today, you’ll put yourself in a good position to help meet these costs.

 

SOURCE: CollegeBoard, Trends in College Pricing 2016, Average Published Charges for Full-Time Undergraduates by Sector 2016-17.

 

 

1 To be eligible for favorable tax treatment afforded to any earnings portion of withdrawals from Section 529 accounts, such withdrawals must be used for “qualified higher education expenses,” as defined in the Internal Revenue Code. Any earnings withdrawn that are not used for such expenses are subject to federal income tax and may be subject to a 10% additional federal tax as well as state and local income taxes.

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