Many parents and grandparents are confused about 529 plan rules. A 529 college savings plan is an investment account whereyour money grows tax-free if it’s used to pay for qualified education expenses. This includes college costs, as wellas $10,000 per year in tuition expenses at private, public or religious elementary and secondary schools. Unlike othersavings vehicles, there are no income limits, and no time limits imposed. In our Annual College Savings Survey, we presented six true or false questions about 529 rules to visitors of Savingforcollege.com.Click through the slideshow to see where the biggest misconceptions lie!
1. I must use the 529 plan offered by my state of residence - FALSE
- 20% of total respondents answered incorrectly
- 18% of grandparents and 21% of parents answered incorrectly
- You can enroll in almost any state’s 529 plan, no matter where you live, but your home state many offer a state tax benefitsfor residents.
Find a 529 Plan. Select your state below.
Did you know that residents are not limited to investing in their own state’s plan? Another state may offer a plan that performs better and has lower fees. Select your state below to see your state’s plan and other options.