1023. Are you worried about the future cost of education for yourself or a child? Laura reviews ten ways a 529 savings plan supercharges education savings and can even be used for young students, non-traditional coursework, and professional career pivots.
Key takeaways
- Contributions to a 529 plan get taxed upfront, but the account growth and withdrawals for qualified expenses are tax-free.
- States sponsor 529 plans with various benefits and fees; however, you don’t have to be a state resident to participate in the plan.
- There are no income restrictions to contribute to a 529, and owners typically name a child, who is the future student, as the account beneficiary.
- Qualified 529 expenses include many costs associated with traditional college, but also include trade schools, vocational training, and professional certifications.
- You can spend up to $20,000 per year on younger students from kindergarten through high school at public, private, or religious schools.
- Leftover 529 funds can be rolled over into a beneficiary’s Roth IRA, with certain restrictions.
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