Anyone who wants to save for a child's education can open a 529 plan account. There may be benefits to opening an account. The account owner keeps control of the money, can make investment decisions, and can even change the beneficiary if plans change. There may be estate tax benefits in some cases.
What is a 529 plan?
A 529 plan is a tax-advantaged savings account designed to be used for the beneficiary's education expenses. Use the money in your 529 for a wide range of college expenses at accredited schools nationwide in addition to tuition expenses for K-12, certain apprenticeship costs, and student loan repayments. 1
Should I invest in a 529 plan or a brokerage account?
When saving for college, 529 plans and individual brokerage accounts are two popular options. A 529 plan is a tax-advantaged investment account designed specifically for education expenses. By contrast, a brokerage account is a general-purpose investment account with no specific tax benefits for education savings.
