Understanding 529 Plans: A Guide to Educational Savings

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A 529 plan is a tax-advantaged savings account designed to help individuals pay for qualified educational expenses, allowing funds to grow tax-deferred and be withdrawn tax-free when used for tuition, room and board, and other eligible costs. There are two main types of 529 plans: prepaid tuition plans and education savings plans, each serving different needs. Recent changes have expanded the uses of these plans to include K-12 tuition, student loan repayment, and the ability to roll over unused funds into a Roth IRA. Participants can establish a plan for themselves or loved ones, potentially reaping tax benefits while preparing for future educational costs.

Source: YAHOO

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