Dashboard Investments Portfolio Insight Fund Compare Viewpoints Resources About us Non-U.S. investors LOG IN Five things you may not know about 529 plans November 30, 2021 Did you know that 529 education savings plans are 25 years old? Photo shows a young girl with a backpack holding her mother's hand. Section 529 of the Internal Revenue Code was created in 1996 after parents and financial professionals lobbied legislators to provide a way for families to save for the rising costs of higher education. By 2000, 30 states had launched a 529 plan. All 50 states, plus the District of Columbia, offer them today. Here’s a rundown of some of the key features of 529 plans. 1. Money can be withdrawn federally tax free.1 The Economic Growth and Tax Relief Reconciliation Act of 2001 exempted 529 plans from federal taxes if used for qualified education expenses. Qualified education expenses include tuition, room and board, books and supplies, and fees. What’s more, a number of states also offer tax advantages for contributing to an account. Check with your state for additional benefits. 2. 529s aren’t just for college. In 2018, the Tax Cuts and Jobs Act expanded the definition of qualified higher education expenses to include tuition payments for private or religious school education from kindergarten through grade 12. Tuition payments are currently capped at $10,000 per school year.2 3. A wide range of higher education programs are eligible. In addition to traditional two- and four-year colleges, tuition and other expenses at apprenticeship programs, trade schools, and even international schools are considered qualified. You can find out which institutions and programs are eligible here. 4. There are many investment options to choose from. 529 plans offer a diverse range of investment options, from individual mutual funds to age- and/or asset-based portfolios. You can change your investments twice a year and can also set up automatic contributions and/or payroll deductions. 5. Contribution limits are significant. The annual gift tax exclusion for single tax filers is $15,000; for married couples filing jointly, it’s $30,000. Single filers and married couples can accelerate their giving to $75,000 and $150,000, respectively, by taking advantage of the five-year gift tax averaging. Most plans have aggregate limits that range between $235,000 and $529,000. Despite their many benefits, only 30% of families have a 529 plan.3 The additional advantages of 529 education savings plans are many and include a wide variety of state plans to choose from, the ability to change beneficiaries without penalties, and minimal impact on financial aid eligibility. As you map out a plan for your child’s education, be sure to meet with your financial professional. He or she can help you weigh the pros and cons of the options available, including 529 education savings plans. Important disclosures Share Topic College saving Related viewpoints September 28, 2021 Does having a 529 account affect financial aid? John Hancock Investment Management 529 education savings plans do affect financial aid, but not to the degree you might think. Read more October 27, 2020 Four reasons why a college education is so important John Hancock Investment Management With the costs of a college education continuing to rise and the pandemic having forced so many schools into remote learning, it’s no surprise that many are questioning the value of a college degree. But here are four reasons why a college degree is still so important. Read more Explore the latest thinking from our network Sign up to get market insight and analysis delivered straight to your inbox. 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John Hancock Investment Management LLC is the investment advisor for the closed-end funds. A widespread health crisis, such as a global pandemic, could cause substantial market volatility, exchange-trading suspensions and closures, affect the ability to complete redemptions, and affect fund performance; for example, the novel coronavirus disease (COVID-19) has resulted in significant disruptions to global business activity. The impact of a health crisis and other epidemics and pandemics that may arise in the future could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other preexisting political, social, and economic risks. Any such impact could adversely affect the fund’s performance, resulting in losses to your investment. Mutual funds © 1999–2021 John Hancock Investment Management Distributors LLC and affiliated companies. All rights reserved. Member FINRA | SIPC, 200 Berkeley Street, Boston, MA 02116 Click here to view a prospectus or summary prospectus. You may also request one from your financial professional or by calling us at 800-225-5291. The prospectus includes investment objectives, risks, fees, expenses, and other information that you should consider carefully before investing. Some information may not be approved by certain organizations. Please check with your organization before using this information. ETFs John Hancock ETFs are distributed by Foreside Fund Services, LLC in the United States, and are subadvised by Dimensional Fund Advisors LP or our affiliate Manulife Investment Management (US) LLC. Foreside is not affiliated with John Hancock Investment Management Distributors LLC, Dimensional Fund Advisors LP or Manulife Investment Management (US) LLC. ETF shares are bought and sold through exchange trading at market price (not NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Click here to view a prospectus or summary prospectus. You may also request one from your financial professional or by calling us at 800-225-5291. The prospectus includes investment objectives, risks, fees, expenses, and other information that you should consider carefully before investing. 529 If your state or your designated beneficiary’s state offers a 529 plan, you may want to consider what, if any, potential state income-tax or other state benefits it offers, such as financial aid, scholarship funds, and protection from creditors, before investing. State tax or other benefits should be one of many factors to be considered prior to making an investment decision. Please consult with your financial, tax, or other professional about how these state benefits, if any, may apply to your specific circumstances. You may also contact your state 529 plan or any other 529 education savings plan to learn more about their features. Please contact your financial professional or call 866-222-7498 to obtain a Plan Disclosure Document or prospectus for any of the underlying funds. The Plan Disclosure Document contains complete details on investment objectives, risks, fees, charges, and expenses, as well as more information about municipal fund securities and the underlying investment companies that should be considered before investing. Please read the Plan Disclosure Document carefully prior to investing. John Hancock Freedom 529 is an education savings plan offered by the Education Trust of Alaska, managed by T. Rowe Price, and distributed by John Hancock Distributors LLC through other broker-dealers that have a selling agreement with John Hancock Distributors LLC. John Hancock Distributors LLC is a member of FINRA and is listed with the Municipal Securities Rulemaking Board (MSRB). © 2021 John Hancock. All rights reserved. Information included in this material is believed to be accurate as of the printing date. John Hancock Freedom 529 P.O. Box 17603 ■ Baltimore, MD 21297-1603 ■ 866-222-7498 ■ jhinvestments.com/529 529 PLANS ARE NOT FDIC INSURED, MAY LOSE VALUE, AND ARE NOT BANK OR STATE GUARANTEED. " "