Hartford Financial Services Group Inc. has been selected to launch and manage a new advisor-sold 529 college savings program in Connecticut, the state’s treasurer announced Wednesday.
CHET Advisor is the first advisor-sold 529 plan sponsored by the state. TIAA-CREF will continue to run the Connecticut Higher Education Trust, a direct-sold 529 college savings plan first launched in 1998.
Denise L. Nappier, the state’s treasurer, said the new 529 plan will allows Connecticut advisers to have a “home state 529 plan to use when helping families plan for college.”
CHET Advisor is available through financial advisers and is the first and only adviser-sold 529 college savings plan with state tax benefits for Connecticut taxpayers. These include: A Connecticut income tax deduction for contributions of up to $5,000 per year ($10,000 for married couples filing jointly); tax-free accumulation of earnings; and tax-exempt distributions for eligible education expenses.
Hartford also serves as program manager for the SMART529 college savings program in West Virginia, which began 2001, and has over 100,000 accounts and $1.2 billion assets under management as of June 30.
Recently, Hartford’s fifth annual college savings survey found that 99% of Americans believe a college degree is important to achieve success in the future. The survey also found that a majority of parents and grandparents want to contribute at least some money to a child’s education, with nearly a quarter willing to give up to $50,000.
The majority of survey respondents believe that taxes will increase over the next few years, highlighting the need for tax-advantaged savings vehicles like 529 college savings plans. And while most Americans recognize that 529 plans are a tax-advantaged way to save for college, less than half are actually using them to save, according to the survey.
Half of the 600 respondents who participated in The Hartford’s survey work with a professional financial advisor. According to the results, they are more likely to understand how 529 plans work, nearly twice as likely to invest in a 529 plan, and more optimistic about their children and grandchildren’s future than those who do not work with a financial advisor.