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Are 529 College Savings Plans Worth It? For many families, yes. The plans provide tax-advantaged savings you can use to pay for tuition at today’s rates or offset other qualified education expenses.
Contributions to 529 college savings plans are made with after-tax dollars. Once money is invested in the account, it grows tax-free, and withdrawals from the plans are not taxed when the money is used for qualified educational expenses. [2] Only 2.5 percent of all families had 529 college savings accounts in 2013. [3]
You can use funds from your 529 plan to pay for qualified education expenses at eligible institutions nationwide. Withdrawals for qualified expenses are tax-free, but non-qualified withdrawals are ...
Tuition always counts as a qualified expense as long as you’re paying it — if it’s paid by a tax-free scholarship, ... A 529 plan can help you save up for college expenses for your children ...
Key takeaways. 529 plans are tax-advantaged accounts that allow a beneficiary to use the funds for qualified education expenses. Funds contributed to a 529 plan are allowed to grow tax-deferred.
That law also permits 529 plans to be used for qualified apprenticeship expenses. Bottom line. A 529 college savings plan offers one of the best vehicles to save for a child’s educational costs ...