Should you have a 529 college savings plan? What to know

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Should you have a 529 college savings plan? What to know

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Should you have a 529 college savings plan? What to know

^{Published on 2025-05-13 15:26:30 - Fortune}

It's never too early to start saving for college on behalf of a child, grandchild, or other loved one.

A 529 savings plan is a tax-advantaged investment account designed to help families save for future education expenses, including college, K-12 tuition, and apprenticeship programs. These plans, available in two types—prepaid tuition plans and education savings plans—allow earnings to grow tax-free and qualified withdrawals to be made tax-free as well. Managed by states, often in partnership with financial firms, 529 plans offer various investment options, typically including age-based portfolios that automatically adjust to become more conservative as the beneficiary approaches college age. While contributions are not deductible on federal taxes, some states offer tax benefits for residents contributing to their home state's plan. Additionally, 529 plans have high contribution limits, flexible beneficiary changes, and can impact financial aid eligibility, making them a versatile tool for educational funding.

Read the Full Fortune Article at:
[ https://fortune.com/article/how-529-savings-plans-work/ ]

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Should you have a 529 college savings plan? What to know