Open an Account
“Having some money put away…helps your child think about what they want to do with their future, and know that they have some financial support, but also your support as a parent to pursue their dreams.” – The Martin Family
Family,
Fort Fairfield
NEXT STEPS
What to Expect
Here’s what you’ll do as you go through the process of opening a NextGen 529 Connect account. Read the Program Description to learn more about investing with NextGen 529.
1. OPEN AN ACCOUNT AT VESTWELL
Once you use the Open NextGen 529 Account button below, you will leave this website and be brought to Vestwell’s Connect website, where you will open your account online.
Can’t complete an application online? Please call FAME for an application at 800-228-3734.
2. PROVIDE INFORMATION
You are the account owner and the beneficiary is the person who will benefit from the account (the student). You’ll need to provide basic information about your and your beneficiary’s identity, including a social security number. You will be asked to enter the age your beneficiary will start using their funds. Based on the expected age entered, you will be presented with the Year of Enrollment Portfolio that best corresponds to the year in which you expect the beneficiary to start using their funds.
3. FUND YOUR ACCOUNT
Most account owners need to add $25 to open their Connect Account. If you opt to make recurring/automated contributions, you can arrange to add any amount, regularly. You can do this when you finish setting up your Connect Account.
Accounts for the benefit of Alfond Grant recipients can be opened with no initial contribution.
Would You Also Like to Build Emergency Savings?
After you open a Connect Account, you have the option to open a separate savings account, through Vestwell, to help you build emergency (or other) savings. This emergency savings account does not enjoy the same tax benefits as a 529 account but does allow you to withdraw your savings without incurring a penalty for a non-qualified withdrawal1
HAVE A QUESTION?
FAQs
Have a question? Get answers to frequently asked questions about NextGen 529 plans. Don’t see your question? Contact NextGen 529.
What can I use a NextGen 529 account for?
You can use your NextGen 529 account funds to pay for a variety of qualified education expenses* at eligible higher education institutions, which include four-year colleges or universities, accredited two-year associate degree programs, vocational schools, trade schools, even qualified online courses– any post-secondary schools that participate in federal financial aid programs—at home or abroad. Qualified education expenses generally include expenses such as tuition and fees, computers, books and supplies, and room and board (for students who attend school at least half time).
In addition, NextGen 529 account funds can be used to pay for fees, books, supplies, and equipment required for the participation of a beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act. A maximum of $10,000 can be withdrawn to pay for principal or interest on qualified student loans of the designated beneficiary or a sibling of the beneficiary.
You can also use up to $10,000 per year for the same beneficiary to pay for K-12 tuition at an eligible elementary or secondary school (although some states still consider K-12 tuition a non-qualified expense).
*Qualified expenses are defined in Section 529 of the Internal Revenue Code. Earnings withdrawn for non-qualified expenses are subject to federal income tax; a 10% federal penalty, and state and local income tax rules, which may vary.
Who can open a NextGen 529? Does it have to be a parent?
You don’t have to be the parent or even related to the student. Parents, grandparents and even family friends can open an account, no matter the income or age of the student. You also can open an account to invest for your own future higher education expenses.
Account owners must reside in the United States and be 18 or older, with a valid Social Security number (without work restrictions) or U.S. taxpayer identification number. Noncitizens need to document their United States residency by providing a copy of their United States Permanent Resident Card (commonly known as a “Green Card”) and passport.
Who is the account owner and who is the beneficiary?
The account owner, also called the participant, is the person who opens and retains control of the account. NextGen 529 accounts can only be owned by one person. The account owner is often a parent, but accounts can also be owned by grandparents, other family members, and even family friends. An adult can also own an account for themselves. The account owner controls the account, opens the account in their name and address, receives all communications associated with the account to help them decide how the money is invested and for what the money is withdrawn.
The designated beneficiary is the person benefiting from the NextGen 529 account. The beneficiary is often a child, but it can also be an adult student saving for a return to school or further training. (In this case, the account owner and the beneficiary can be the same person.)
If the account owner wishes to share a duplicate account statement with another person, they can request a duplicate by contacting the account servicer.
What is a Connect Account?
A Connect Account is a NextGen 529 account. A Connect Account is for people who are ready to save for higher education, do not want to work with a financial professional, and want a simplified approach with fewer investment options to choose from. After you open a Connect Account, you have the option to open a separate savings account, through Vestwell, to help you build emergency (or other) savings.1
Is there a minimum amount that I need to contribute?
There is no minimum contribution amount after you open your account with $25. Make contributions when you can, in whatever amount you are able.
Also, if your child received the $500 Alfond Grant, no initial contribution is necessary.
How do I contribute to a NextGen 529 account?
Contributions can be made online, by check, or by transferring or rolling over funds from another account. You can make it easy by setting up automatic contributions from your checking or savings account, or by using payroll deduction.
Contributions are recorded on quarterly account statements that are sent by the account servicer directly to the account owner. Duplicate statements sent to another person can be requested by contacting the account servicer.
Learn more about making contributions.
How is my money invested?
A Connect Account offers a Year of Enrollment investment option. Year of Enrollment Portfolios move from higher risk to more conservative options automatically as your student ages/gets closer to enrollment to protect your investment.
When you open your Connect Account you will be asked to enter the age your beneficiary will start using their funds. Based on the expected age entered, you will be presented with the Year of Enrollment Portfolio that best corresponds to the year in which you expect the beneficiary to start using their funds.
After your account is opened, you can change your investment option to another Year of Enrollment Portfolio or to the NextGen Savings Portfolio. The NextGen Savings Portfolio is invested in a bank deposit account, currently with Fifth Third Bank. Amounts deposited in the NextGen Savings Portfolio are eligible for FDIC insurance.
Can I get Grants for Maine Residents with a Connect Account?
Yes! Matching Grants are available for Connect Accounts, but only for funds you invest in the Connect Account. Funds you save in the Emergency Savings Account cannot be matched.
GRANTS FOR MAINE RESIDENTS
It’s Good to Be a Mainer
There’s grant money available for Maine residents. These grant programs can really boost your savings.1
$500 Alfond Grant for Maine Babies
$100 Initial Matching Grant
$100 Automated Funding Grant
30% NextStep Matching Grant
1The Emergency Savings Account (ESA) is not part of the NextGen 529 Program, not entitled to the tax advantages available to Participants invested in the NextGen 529 Program, and not affiliated with FAME. All deposits in the ESA are subject to terms and conditions separate and apart from the terms and conditions that govern the NextGen 529 Program. Neither the NextGen 529 Program nor FAME guarantees or insures any deposits in the ESA.
2Grants for Maine Residents are linked to eligible Maine accounts. An Alfond Grant recipient is eligible to receive the $100 Initial Matching Grant if the minimum required initial contribution is made before the beneficiary’s first birthday. Upon withdrawal, grants are paid only to institutions of higher education. See Terms and Conditions of Maine Grant Programs for other conditions and restrictions that apply. Grants may lose value.
3The Alfond Grant is not automatic in all circumstances and is also available in limited other circumstances. The use of the Alfond Grant is also subject to certain restrictions – see Alfond Grant Guidelines.
USRRMH1024U/S-3948830
