529 College Savings Plans
Useful Information About 529 College Savings Plans
If you find yourself intimidated by the ever-rising price of higher education, then a 529 college savings plan might be a key component in saving for a college education. A 529 college savings plan is a tax-advantaged way to save for college and pay for higher education expenses. Unlike some other savings vehicles, a 529 college savings plan may allow you to make sizable contributions.
Types of 529 Plans
Although many details of 529 college savings plans vary by state, they generally come in two forms:
College savings plans
Allow you to invest your money in an account to pay for the student’s higher education expenses. Students can use the funds for qualified expenses at accredited institutions in the U.S. and abroad.
Prepaid tuition plans
Allow you to lock in tuition rates at eligible colleges or universities with a lump-sum investment or monthly payments. In other words, since you are paying in advance, you are avoiding potential tuition inflation down the road.
Investments in 529 college savings plans are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
Conditions, such as contribution limits, vary by plan. 529 college savings plans are subject to market risk and volatility. Accounts may lose or gain value. Diversification does not assure a profit or protect against loss.
The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. We are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.