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529 plan

What is a 529 Plan?

A 529 plan, sponsored by a state or state agency, is a tax-advantaged investment plan designed to encourage saving for the future higher education expenses of a designated beneficiary (typically one's child or grandchild).

Savings can be used for tuition, books, and other education-related expenses at most accredited two- and four-year colleges and universities, U.S. vocational-technical schools, and eligible foreign institutions. U.S. residents of any state, who are 18 years of age or older (or the age of majority in some states), may invest in most state plans.

Tax advantages
Any earnings in a 529 plan have the potential to grow free of federal income taxes. And when you withdraw funds for your child’s higher-education expenses, you generally won’t pay federal taxes, and you may not have to pay state taxes.

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