After Graduation

Depending on the types of accounts you own, you may have different options for distributing your assets.

Coverdell Education Savings Account (ESA)

You have choices at Janus Henderson for remaining funds, including distributing the funds by age 30. This will have tax implications and potential penalties, unless you use them for qualified education expenses. You may be able transfer or roll over funds to another designated family member under the age of 30. Read about the Coverdell Education Savings Account.

Remember: If the beneficiary uses the funds for purposes besides education, income tax may be assessed and a 10% penalty may also be applied.

Custodial Accounts

Custodial accounts, also known as Uniform Gift to Minors Accounts (UGMA) or Uniform Transfer to Minors Accounts (UTMA) are subject to different rules than ESAs. These accounts are not restricted and funds can be withdrawn at any time.

It's time to transfer complete ownership to the former minor.

The custodian’s control of a Uniform Gifts/Transfers to Minors Act (UGMA/UTMA) account terminates once the minor reaches the legal age of termination (usually between the ages of 18 and 21) as determined by the laws of the state of governance under which the account was established. At this time, the custodial account needs to be transferred (there are no tax consequences) into a taxable non-retirement account for the former minor, who then becomes the full owner and decision-maker.

Use the Janus Henderson Change of Registration form to make this change.

You can avoid tax obligations and penalties on leftover assets in a 529 College Savings Plan or Coverdell Education Savings Account (ESA) by using remaining funds toward continuing education like graduate school or an additional degree. Keep in mind that for an ESA, you generally must use the funds by age 30.

Stay aware: You may have additional tax obligations on any money not used for educational purposes. You can transfer your account to another eligible student to avoid penalty.

Retirement is a scary topic for today’s generation as the financial future of many government-sponsored retirement benefits remains uncertain. The burden of providing employees with adequate retirement income has shifted away from private employers and onto individuals. Starting on the path to retirement today leaves you with plenty of time to take advantage of potential compound growth. A hypothetical $1,000 investment, left alone at a 5% annual rate of return with compounded earnings, will earn $3,386 in 25 years. As long as you have earned income, you can start contributing to an IRA today.

DOWNLOAD AN IRA APPLICATION

Whatever your goals for investing might be, Janus Henderson offers a variety of different types of accounts and paths to get there. For general information about investment strategies, visit our Investing Basics section. You can also learn more about our funds online or by calling a Janus Henderson Representative who can help you understand more about what Janus Henderson has to offer and take full advantage of your options.

Dig deeper: Visit Investing Basics to start from the beginning.