529 plans are one of the most common ways to save for college education. Learn more about 529 plans below, and the role they can play in funding education for your family. What is a 529 plan? A 529 education savings plan is an investment account that offers tax benefits when used toward qualified education expenses for the account beneficiary.
Should a 529 plan be a custodial account?
If money from a custodial bank or brokerage account, such as a UTMA or UGMA account, is used to fund a 529 plan, then the 529 plan should be set up as a custodial 529 plan. With a custodial 529 plan account, the child is both the account owner and the beneficiary.
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.
