Should you invest in a 529 college savings plan?

For most parents looking for a way to save for their child’s college education, a 529 college savings plan is a wise choice. That’s because the money you invest in one of these accounts grows tax-free if you use the funds toward eligible education expenses. Individual states offer 529 plans.

What is a 529 college savings plan?

Also known as 529 college savings plans, these are tax-advantaged investment accounts designed for education savings. They work much like a Roth 401 (k) or Roth IRA by investing your after-tax contributions in mutual funds or similar investments. 529 plans offer several investment options from which to choose.

How much money can a 529 plan save?

You can spend 529 plan savings on college expenses, as well as K-12 tuition, certain apprenticeship costs, and student loan repayment up to $10,000 per beneficiary and each sibling. How Does a 529 Plan Work?