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The two types of 529 plans include: An education savings plan that allows you to open an investment account that can be used for future education expenses, including tuition, room and board, books ...
Using 529 Plans. Qualified Education Expenses. ... If you open a 529 education savings plan, you may be asked to choose an investment option, typically from a selection of mutual funds, ...
A 529 plan allows a participant to set up a tax-advantaged account to allow a beneficiary to use the funds for qualified education expenses. The participant deposits after-tax money in the account.
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]
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 ...
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.