Tennessee 529 College Savings Plan

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Tennessee 529 College Savings Plan

Tennessee Path2College 529 Plan

The Tennessee 529 Program allows you to save for a college education with regular contributions as low as $25. Earnings are federal tax-deferred and as long as the disbursements are used for eligible college expenses, they are federal tax free. The program manager is TIAA-CREF Tuition Financing, Inc. Investors should realize that the funds placed into a 529 savings program are not guaranteed and can fluctuate up or down depending on what the underlying investments do.

The Tennessee Path2College 529 Plan offers seven different investment options, including Managed Allocation, Aggressive Managed Allocation, 100% Equity, Balanced Fund, 100% Fixed Income, Money Market and Guaranteed.

  • The Managed Allocation is an age-based portfolio which invests more aggressively when the benficiary is young, then moves to more conservative investments as they grow towards college age.
  • The Aggressive Managed Allocation is also age based, but begins with a higher percentage on funds invested into equities than the previous option. As time progresses, the funds will be moved into more conservative funds like the Managed Allocation
  • The 100% Equity Option is invested into domestic mutual funds which will be invested 100% in stocks and other equities. Tis fund is not age-based and funds invested here will remain until you decide to move them. While this is a more volatile option than the others, it may offer the possibility of higher returns over the long haul, but greater losses are also possible.
  • The Balanced Fund invests in equity and bond funds in approximately equal proportions. Moderate investors may feel comfortable with the balanced option.
  • 100% Fixed Income is designed to return potentially higher returns than those offered by the Guaranteed Option.
  • The Money Market Portfolio attempts to provide safety of capital as well as a higher rate of return that offered by the Guaranteed Option.
  • The Guaranteed Option offers a low level of risk which may be appropriate for those funds invested for a short time frame as well as for very conservative investors.
All potential investors should check for more information at the Path2College 529 Plan website. You should also check with a financial advisor and tax advisor to see if a 529 investment is right for you.

Tennessee BEST Prepaid Plan

In November of 2010, the Tennessee Legislature voted to stop new purchases in the BEST Prepaid Tuition Program. Those who had already made purchases will still be able to use them.

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