What you need to know about 529 college savings plans

A 529 plan is a tax-advantaged education savings vehicle operated by a state, state agency or educational institution that enables families to set aside funds for future college expenses. Authorized by Congress in 1996, 529 plans, or “qualified tuitions plans,” are named after Section 529 of the Internal Revenue Code which governs these savings plans. Similar to how 401(k) plans changed retirement savings a few decades ago, 529 plans changed the world of college savings.

Tax advantages and more

529 college savings plans offer some unique features:

Selecting a plan

Currently, over 50 different college savings plans are available. While you may join any state’s 529 college savings plan, each has its own rules and restrictions, which can change at any time. Consider a few key features:

 

With so many plans available, consider consulting an experienced financial professional to help you select a plan and choose plan investments that are right for your family.