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College Planning with American Insurance and Investments

Start planning today for a smarter tomorrow.

It's often said, and it's always true: It's never too early to start saving for your child's college education. While the task can seem overwhelming, First Commercial Bank, N.A (USA) is here to help you get started.^†

Count on us to help your family navigate options like the Section 529 plan, Education IRAs, and more. With our help, college can be something to look forward to with confidence – not confusion.

The benefits:

• A variety of savings options
• Some accounts are tax-deferred and offer tax-free withdrawals for qualified educational purposes
• Beneficiaries may be changed without penalty
• Contributions may be made by any family member, including grandparents, aunties and uncles, cousins, and more

Tips:

Plan ahead. While your child is young, start saving for their education by contributing to one or more of the tax-advantaged savings plans available.

Determine the education financing "gap."

• Determine the "gap" between the cost of the education and the amount of savings you have accrued
• Work with your child to determine how the educational funding "gap" will be covered (i.e., student loans, parent loans, scholarships, or work study)

Saving for an Education.

Start early: open savings and investment plans when your child is young. Our Financial Consultants can help you by informing you of some of the different tax-advantaged ways to save for your child's college education:

Section 529 College Savings Plan*

This plan provides the greatest opportunity for saving for your child's education. Contributions are tied to the gifting exclusion limits — the limit for 2010 is $13,000. Not only that, but a special rule allows you to make up to five years worth of contributions (or $65,000) in one year. The best part is the contributions are tax-deferred and may be withdrawn income tax-free for qualified educational purposes.

Education IRA (CESA)

A CESA enables parents, grandparents, guardians to save for a child's future education. Your contributions are not tax-deductible, but all earning and withdrawals are tax-exempt and free of withdrawal penalties as long as the withdrawals are made for qualified education expenses.More

Custodial Account

This account provides a wide variety of investment options and earnings. Up to certain limits, these accounts are taxed at the child's rate. Withdrawals may be made for any expenses that benefit the child – not just education expenses.

College Scholarships

As your child enters her junior year of high school, she will start the college application process. As she narrows her choice of the institutions to which she intends to apply, you will then be in a better position to determine the "gap" between the cost of college education and the educational savings you have accrued.

Getting Started

College and post-graduate education is a substantial expense. Our Financial Consultants will assist you in preparing for this expense. Before you meet with them you should:

• Indicate what type of school you child is planning to attend (private or public) and the projected cost of attending that school
• Identify the number of children you have who are planning to attend college and their age
• Provide details on your financial situation and income

*  Under a "sunset provision", the tax exemption for earnings on qualified withdrawals is scheduled to expire on December 31, 2010, unless extended by Congress. As with all tax-related decisions, consult your tax advisor. Withdrawals for expenses other than qualified education expenses are subject to income tax and an additional 10% penalty on earnings. You should consider a 529 Plan's fees and expenses such as administrative fees, enrollment fees, annual maintenance fees, sales charges, and underlying fund expenses, which will fluctuate depending on the 529 Plan invested in and the investments chosen within the plan. You should also consider the inherent risks associated with investing in 529 Plans such as investment return and principal fluctuation, which will also vary based on the investments made within the plan. This and other important information is contained in the issuers official statement. The official statement should be read carefully before investing.