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February 28, 2002 at 07:00 PM
NU Online News Service, Feb. 28,12:37 p.m. – Hartford Life Insurance Company, Simsbury, Conn., is starting to sell the Section 529 college savings program plans it set up for West Virginia.
Section 529 of the federal Internal Revenue Code lets states set up generous, tax-deferred college savings programs. Investors can defer federal income taxes on the contributions, and the beneficiaries can use funds for qualified tuition and living expenses without paying federal income taxes on the withdrawals.
Although a financial services company must get a state to sponsor a plan, once it has a state sponsor, it can sell the plan throughout the United States.
The Hartford Life/West Virginia program, called the SMART 529 program, is flexible enough that investors can set up accounts for their own children, friends’ children, strangers’ children, or even themselves. In theory, scholarly retirees might be able to use the accounts to spend a few of their golden years as college students.
