What is a 529 plan?

One option is a 529 plan, also known as a qualified tuition plan. This tax-advantaged savings plan is designed to help you pay for education. 1. Select a 529 Plan Before you can open a plan, you’ll need to decide which one is right for you. You can choose from two types of plans: prepaid tuition or a savings plan. Prepaid tuition.

How do I open a 529 plan?

In order to open a 529 plan, you'll first need to have prepared bank and personal information for both yourself and the beneficiary. All 50 states, the District of Columbia, and many brokerage firms offer 529 plans. To find the best fit for your long-term savings goal, you'll need to investigate the potential advantages of each.

How do I choose a 529 plan?

Start by looking into your state’s 529 plan to see if it offers a state income tax deduction or tax credit on contributions. When choosing a 529 plan, focus on the return on investment, costs and fees, and tax benefits. Minimizing costs is crucial for maximizing net returns. Next, compare the various 529 plan types.