We all know that college education is expensive, so its important to plan in advance for financing your college education. Using a 529 college-saving plan is an investment account that enables you to save for college while minimising tax. You can use money saved in a 529 plan to pay for all major college expenses like board, tuition, and related expenses. Your parents most likely already have a 529 plan setup for your education (hopefully! right?), it’s still worth knowing more about how they actually work.
The main advantage of using a 529 plan for saving for college is that the money you transfer into the plan you don’t pay taxes on the earnings, or when its time to withdraw the money to pay for college.
For more detailed analysis of how 529 college-saving plans work, here are two articles from The Wall Street Journal:
For questions about transferring 529 plans, gift tax, and penalty’s, you can find the answers here:
Hopefully, this information helps you save for college!