Introduction
The UNIQUE College Investing Plan is a tax-advantaged 529 plan offered by the state of New Hampshire and managed by Fidelity Investments. This plan is designed to help families save for future education expenses, offering a range of investment options and benefits. In this article, we will delve into the details of the UNIQUE College Investing Plan, exploring its features, benefits, investment options, and performance.
What is the UNIQUE College Investing Plan?
The UNIQUE College Investing Plan is a 529 savings plan that allows individuals to save for higher education expenses on a tax-advantaged basis. It is open to both residents and non-residents of New Hampshire, making it a versatile option for families across the United States. The plan is managed by Fidelity Investments, a well-known financial services company, ensuring that investors have access to a wide range of investment options and professional management.
Key Features and Benefits
Tax Advantages:
- Federal Tax Benefits: Contributions to the UNIQUE College Investing Plan grow tax-deferred, and withdrawals used for qualified education expenses are free from federal income tax. This includes tuition, fees, books, room and board, and other eligible expenses at accredited colleges, universities, and vocational schools nationwide. Additionally, the plan can be used for K-12 tuition expenses and certain apprenticeship costs.
- State Tax Benefits: While New Hampshire does not offer state tax deductions for contributions, residents can still benefit from the federal tax advantages.
Investment Options:
- Age-Based Strategies: The plan offers three age-based investment options, which automatically adjust the asset allocation as the beneficiary approaches college age. These options include actively managed funds, index funds, and a blend of the two.
- Custom Strategies: Investors can also choose from 10 static investment options, allowing for a more personalized approach based on individual risk tolerance and investment goals. These options include a stable value portfolio and an interest-bearing deposit account .
Flexibility and Accessibility:
- No Minimum Initial Investment: The UNIQUE College Investing Plan does not require a minimum initial investment, making it accessible to families at all income levels.
- Automatic Investment Plan: Investors can set up automatic contributions with a minimum of $15 per month or $45 per quarter, helping to build savings over time.
Performance and Ratings:
- The UNIQUE College Investing Plan has received recognition for its performance and management. It earned Morningstar's 2024 Silver Medal, indicating a strong track record and robust investment options.
Investment Options in Detail
The UNIQUE College Investing Plan offers a variety of investment options to suit different risk tolerances and investment goals. Here are some of the key options:
Age-Based Portfolios:
- Fidelity Funds: These portfolios are actively managed and adjust their asset allocation as the beneficiary ages. They include options like the NH Portfolio 2042, NH Portfolio 2039, and others, each with varying levels of risk and return potential.
- Fidelity Index Funds: These portfolios use index funds to track market indices, offering a more passive investment approach with lower fees. Options include the NH Portfolio 2042 (Fidelity Index) and NH Portfolio 2039 (Fidelity Index).
- Blend Portfolios: These portfolios combine actively managed funds and index funds, providing a balanced approach. Options include the NH Portfolio 2042 (Blend) and NH Portfolio 2039 (Blend).
Static Portfolios:
- Aggressive Growth Portfolio: This portfolio aims for high growth potential with a higher level of risk. It is suitable for investors with a longer time horizon.
- Moderate Growth Portfolio: This portfolio offers a balanced approach with moderate risk and return potential.
- Conservative Portfolio: This portfolio focuses on preserving capital with lower risk, suitable for investors nearing the college years.
Stable Value Portfolio:
- This portfolio aims to provide stable returns with low risk, investing in a separately managed account that may include individual securities or Fidelity mutual funds.
Fees and Expenses
The UNIQUE College Investing Plan has a tiered fee structure that varies depending on the investment option chosen. Here are some of the key fees to consider:
- Underlying Fund and Management Expenses: These fees vary based on the specific portfolio and range from 0.01% to 0.78%.
- Program Manager Fee: This fee ranges from 0.04% to 0.07% depending on the portfolio 7.
- State Fee: This fee ranges from 0.01% to 0.10% depending on the portfolio.
- Total Annual Asset-Based Fee: This fee ranges from 0.10% to 0.95% depending on the portfolio.
How to Open an Account
Opening a UNIQUE College Investing Plan account is straightforward. Here are the steps to get started:
- Visit the Fidelity Website: Go to the Fidelity website and navigate to the UNIQUE College Investing Plan section.
- Choose Your Investment Option: Select from the age-based or custom strategies based on your investment goals and risk tolerance.
- Set Up Automatic Contributions: Consider setting up automatic contributions to build your savings over time.
- Complete the Application: Fill out the online application and provide the necessary information to open your account.
Conclusion
The UNIQUE College Investing Plan offers a comprehensive and flexible way to save for future education expenses. With its tax advantages, diverse investment options, and strong performance track record, it is a valuable tool for families planning for higher education. Whether you choose an age-based strategy or a custom portfolio, the UNIQUE College Investing Plan provides the tools and support needed to achieve your savings goals.
For more information and to start saving today, visit the Fidelity website and explore the UNIQUE College Investing Plan.
