529 Plan
A 529 plan is a tax-advantaged account for education costs. Your contributions grow tax-free, and withdrawals for qualified expenses — tuition, room and board, even up to $10,000 of student loans — are tax-free too. Many states also offer a tax deduction for contributing.
The old objection — that unused money was trapped — has largely been answered: leftover funds can now be rolled into the beneficiary's Roth IRA, subject to a lifetime cap and conditions including a minimum account age, and the beneficiary can otherwise be changed to another family member. Withdrawing for anything else costs tax plus a penalty on the earnings only, never on your contributions. Qualified spending has widened beyond tuition to include room and board, computers and, within annual limits, K-12 tuition and certain student loan repayments. Most plans hold age-based portfolios that shift toward safety automatically. State tax deductions vary, so check your own state's plan before assuming another is better.
Put it to work
Investment Calculator
Project an investment portfolio's growth with monthly contributions — final value, your money vs market growth, and the year-by-year path.
Savings Goal Calculator
Two answers for any savings goal: the monthly deposit that hits your target on time, and when you'd get there at your current saving pace.