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What is a 529 savings plan?
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6th Nov 2009 by Daniel Cross, ChFC
A 529 savings plan is a tax advantaged account used for qualified educational expenses. Almost every state offers one it two forms: a prepaid tuition plan and a 529 savings plan. The prepaid tuition plans allow a person to lock in the current price of school for a child that may not be going to college for over a decade. The 529 savings plan invests in mutual funds and can help protect against inflation. The money is accumulated and withdrawn tax free as long as it is used towards qualified education expenses like tuition, books, supplies, and even room and board. The money can be used in any state although it may be taxed at the state and local level unless used in the state from which it was purchased. Proceeds are always free from federal income taxation.
A 529 savings plan is a tax advantaged account used for qualified educational expenses. Almost every state offers one it two forms: a prepaid tuition plan and a 529 savings plan. The prepaid tuition plans allow a person to lock in the current price of school for a child that may not be going to college for over a decade. The 529 savings plan invests in mutual funds and can help protect against inflation. The money is accumulated and withdrawn tax free as long as it is used towards qualified education expenses like tuition, books, supplies, and even room and board. The money can be used in any state although it may be taxed at the state and local level unless used in the state from which it was purchased. Proceeds are always free from federal income taxation.
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6th Nov 2009 In Investing
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Subjects: 529 savings plan,