529 Plans: A Tool for Education CostsJan 21, 2022
Though education costs continue to climb, starting to save early can make a difference.
Once you fund a 529 account, any growth of that money is generally income tax-free. And it can normally be distributed income tax-free if it’s used to pay for qualified education expenses, including tuition, room and board, books and supplies.1
Because contributions to a 529 plan are generally excluded from a donor’s gross estate calculation,2 you can typically move money from your taxable estate to beneficiaries estate tax-free, without ever losing control.
Help pay for private K-12 education, graduate school, semesters abroad, apprenticeship programs and student loans.1 Stay in full ownership of your account even as you change beneficiaries or withdraw funds.3
They're tax friendly, flexible and available to anyone. Yet, 529 education savings plans are still underused. Here are five things that parents, grandparents and anyone hoping to get a leg up on college costs need to know.