A 529 plan is a tax-advantaged account for education expenses. You contribute after-tax money; it grows tax-free, and withdrawals for qualified education costs are tax-free. Many states also offer a state tax deduction for contributions. This is educational information, not advice.
529 College Savings Plans
Tax-free growth for education costs.
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How they work
You open a plan (you can use almost any state's plan), choose investments — often age-based portfolios that get more conservative as college nears — and withdraw tax-free for tuition, fees, books, and certain other education costs. Non-qualified withdrawals are taxed and penalized on the earnings.
Flexibility
You can change the beneficiary to another family member, and recent rules allow limited rollovers of leftover funds to a Roth IRA under certain conditions. Check your state's specific plan and current federal rules before contributing.
Educational information only — not investment advice, and not a recommendation to buy any security. Expense ratios are approximate and can change; verify with the fund issuer. We are not a licensed financial advisor.
Frequently asked questions
Do I have to use my own state's 529 plan?
No — you can invest in most states' plans, but your home state's plan may offer a state tax deduction.
What if my child doesn't go to college?
You can change the beneficiary, use funds for other qualifying education, or, under current rules, roll limited amounts to a Roth IRA. This is educational information, not advice.
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