Ivy Funds - Comparing college savings options

Comparing college savings options

	529 Savings Plan	Coverdell Education Savings Accounts (Formerly Education IRAs)	UTMA/UGMA
Income limitations	None	AGI limits apply	None
Maximum account balance or yearly contribution limit per beneficiary	Varies by state —maximum balance is until the aggregate balance of all Program accounts per beneficiary is reached ($340,000 for 2009-2010 academic year).	$2,000 annually	$12,000 can be donated per contributor without exceeding the annual federal gift tax exclusion
Taxation of account earnings and qualified withdrawals	Account earnings grow federal income tax-deferred until withdrawn. Withdrawals are federal income tax-free if used for qualified higher education expenses. State and local taxes may apply.	Account earnings grow federal income tax-deferred until withdrawn. Withdrawals are federal income tax-free if used for qualified higher education expenses.	Earnings are taxable on a current basis at the child’s and/or parent’s rate, depending on the amount of income earned. Withdrawals of contributions are not subject to income tax.
Ability to change beneficiaries	Yes	Yes	No
Control of withdrawals	Owner of account	Owner of account	Transfers to child when child reaches legal age
Investment Options	Age-based portfolios, static portfolios and single mutual fund portfolios available with many 529 plans	Wide range of securities	Wide range of securities
State tax deductible contributions	Varies by state	No	No
Qualified use of proceeds	Any accredited postsecondary school in the U.S.	Any qualified K-12 expenses, plus any accredited postsecondary school in the U.S.	Not applicable. Custodian may make withdrawals for a variety of uses for the minor’s benefit.
Penalties for non-qualified withdrawals	10% penalty on earnings	10% penalty on earnings	No
Ownership of assets for financial aid purposes (may vary with private institutions)	Normally considered account owners until withdrawals begin then earnings withdrawn count as beneficiary’s income.	Student	Student
Age restrictions	None	Contributions to account cannot be made after beneficiary’s 18th birthday. Qualified distributions must generally be taken within 30 days after beneficiary’s 30th birthday unless rolled over to a new beneficiary.	Account transfers to child when child reaches legal age.

An Investor should consider the investment objectives, risks, charges and expenses of a 529 Plan before investing. More information about 529 plans can be found in the issuer's official statement, which should be read carefully before investing.

Past performance is no guarantee of future results. The Ivy Funds are managed by Ivy Investment Management Company and distributed by its subsidiary, Ivy Funds Distributor, Inc. Waddell & Reed Financial, Inc., the ultimate parent company of Ivy Funds Distributor, Inc., acquired the investment advisor to the Ivy Funds in December 2002.

The products and services described in this website are offered only in the United States, Puerto Rico and the U.S. Virgin Islands. Nothing in this website should be considered a solicitation to buy or an offer to sell such products and services in any jurisdiction where the offer or solicitation would be unlawful under the laws of such jurisdiction. Ivy Funds distributed by Ivy Funds Distributor, Inc. and Waddell & Reed InvestEd Portfolios distributed by Waddell & Reed, Inc. are offered by prospectus only.

Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. For a prospectus containing this and other information for the Ivy Funds, call your financial advisor or click here. Please read the prospectus carefully before investing.