Merrill Lynch & Co. has introduced a section 529 tax-deferred college investment program sponsored by the Finance Authority of Maine.
Introduced last week, the NextGen College Investing Plan lets couples contribute up to $100,000 a year, which can be withdrawn and used for college expenses, including tuition and housing. Investors do not have to live in Maine, and funds can be used at any accredited college in the country. New York-based Merrill says it is the first full-service broker to offer the program.
Investments are allocated among funds managed by Merrill according to the child's age-the younger the beneficiary, the riskier the fund mix, said James J. Fadule, a vice president and business development manager at Merrill.
Mr. Fadule said Maine had chosen Merrill to administer its 529 program because of the flexibility of Merrill's plan.
Section 529 of the Internal Revenue Code permits states to create such college plans, but the terms of the plans vary from state to state. For instance, states have different minimum and maximum contributions.