If you are planning to help cover the cost of a child’s education someday, opening a 529 plan is often considered one of the best ways to start saving. That’s because a 529 college savings plan offers myriad benefits — it “allows you to invest in high-return assets, avoid taxes on the capital gains while in the account and then withdraw those earnings tax-free for qualified education expenses,” said Bankrate.
While this college savings vehicle can be a great fit for some, it’s not necessarily right for everyone. Here is what you need to know about the pros and cons of 529 plans to determine if this is the best savings option for you.
How do 529 plans work?
Sign up for The Week’s Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
What are the benefits of a 529 plan?
Are there any drawbacks to 529 plans?
When does a 529 plan make sense?
Explore More
To continue reading this article…
Create a free account
Continue reading this article and get limited website access each month.
register for free
Already have an account? Sign in
Subscribe to The Week
Get unlimited website access, exclusive newsletters plus much more.
Subscribe & Save
Cancel or pause at any time.
Already a subscriber to The Week?
Unlimited website access is included with Digital and Print + Digital subscriptions.
Create an account with the same email registered to your subscription to unlock access.