Saving Money for College: Everything to Know About 529 Plans

Though keeping money in a checking or savings account shields it from that volatility, “it’s just a trickle of interest,” Lee says. “Plus it doesn’t keep up with the inflation of college costs.”

Are 529 plans only for college?

Nope! Recently they were expanded to cover graduate school and even private K-12 programs, up to $10,000 annually.

What if I invest in a 529 plan and my child doesn’t go to college?

These plans are designed exclusively for educational costs, so if you remove it for any other reasons, Lee cautions, you will have to pay a penalty and tax on the investment account’s earnings. However, if you have other children or family members who will be attending college or graduate school, you can transfer the money for them.

For more on 529 plans, and finding the right one for you, visit

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