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College Savings Plans: 529 Plans Explained

FinanceHub
Feb 26, 2024
8 min read

College costs are rising. 529 plans offer tax-advantaged savings for education expenses. Start early to maximize growth.

What is a 529 Plan?

A 529 plan is a tax-advantaged savings account for education. Contributions grow tax-free. Withdrawals for qualified education expenses are tax-free.

Benefits:

  • • Tax-free growth
  • • Tax-free withdrawals for education
  • • State tax deductions (varies by state)
  • • No income limits
  • • Flexible beneficiary changes

Qualified Expenses

Tuition, fees, room and board, books, computers, and supplies. Up to $35,000 can be rolled to a Roth IRA. Recent changes expanded flexibility.

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