IVY INVESTED Frequently Asked Questions

The Ivy InvestEd℠ 529 Plan is a tax-advantaged education savings plan designed to help prepare for future education goals.

Q. How can account funds be used for education needs?
Q. What if the designated beneficiary receives a scholarship?
Q. What if the designated beneficiary decides against using account funds for education needs?
Q. Does the Ivy INVESTED 529 Plan offer estate-planning benefits?
Q. If a person is invested in another 529 plan, can he/she transfer the account to an Ivy INVESTED 529 Plan?
Q. Are the Ivy INVESTED 529 Plan investments guaranteed?
Q. Can the account owner still contribute to a designated beneficiary’s Coverdell Education Savings Account?
Q. Does the account owner have to select a college, university, technical school, etc. now?
Q. Can account owner borrow money against the Ivy InvestEd 529 Plan account?
Q. Can the account owner borrow money against my Ivy INVESTED 529 Plan account?
Q. Can the account owner and his/her spouse set up a joint account?
Q. Can organizations establish Ivy INVESTED 529 Plan scholarship programs?
Q. Who manages the Ivy INVESTED 529 Plan?
Q. Is there a minimum amount the account owner must invest to open an Ivy INVESTED 529 Plan account?
Q. How does the account owner make a withdrawal from an Ivy INVESTED 529 Plan account?

1. The earnings portion of any non-qualified withdrawals (i.e., generally those not used for qualified higher education expenses) is subject to a federal tax and possibly state tax. In addition, the earnings portion of a non-qualified withdrawal is subject to an additional federal penalty in the form of an additional 10% tax on the earnings portion of the withdrawal. The 10% penalty does not generally apply to certain distributions made after the death or disability of the designated beneficiary or after the receipt of certain scholarships.

2. There may be federal gift or generation skipping transfer tax consequences if the new designated beneficiary is a member of a younger generation than the prior designated beneficiary.

3. Although the U.S. Department of Education has advised several 529 plans regarding the treatment of accounts in 529 plans for financial aid purposes, the treatment is subject to change by regulations, legislation or otherwise. Specific educational institutions may also treat 529 plan investments in a different manner. Accounts for which the designated beneficiary is also the account owner may be treated as if it were an asset of the parent for financial aid purposes.

4. The tax treatment and state law probate treatment of the designation of a successor account owner and the transfer of ownership to such successor is not certain and may vary depending on the particular facts and state law involved.

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Before investing, investors should carefully consider the investment objectives, risks, charges and expenses of the Ivy InvestEd 529 Plan. This and other information is found in the InvestEd Portfolios prospectus, and the Ivy Funds prospectus, the Ivy InvestEd 529 Plan Program Overview, and the InvestEd 529 Plan Account Application. All of these items are available from these links or from a financial professional. Please read the prospectus carefully before investing.

Before investing, non-residents or tax-payers of states other than Arizona should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors than those offered under the Ivy InvestEdSM 529 Plan. Please consult your tax professional regarding your personal tax situation.

The Ivy InvestEd 529 Plan and shares of InvestEd Portfolios are offered by Waddell & Reed, Inc. as part of the Arizona Family College Savings Program Trust Fund, a 529 plan administered by the Arizona Commission for Postsecondary Education (the “Program”). Waddell & Reed, Inc. is one of multiple financial Institutions eligible to offer Investments under the Program. Accounts a not insured by the State of Arizona, the Trust, the Arizona Commission for Postsecondary Education, or any other governmental entity, Waddell & Reed, Inc., Ivy Distributors, Inc., or any affiliated or related party, and neither the principal deposited nor the Investment return is guaranteed by any of the referenced parties.

Past performance is not a guarantee of future results. Investments into a 529 plan, including the Ivy InvestEd 529 Plan, are not guaranteed, and all investments involve a certain degree of risk. The value of your Ivy InvestEd 529 Plan account will depend upon the performance of the portfolios in which your account is invested and will fluctuate. It is possible that the value of your account may be less than the amount you invested.

The information provided may include references to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to assist in the understanding the issues discussed. Neither Waddell & Reed, Inc. nor Ivy Distributors, Inc., nor their associates offer tax, legal, or accounting advice. You may want to consult with your accountant or tax professional to discuss your personal situation. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon and risk tolerance.