How Does a 529 Plan Work?
For most parents, paying college tuition out of pocket is simply out of the question. If you’re one of those parents, you probably know what a 529 Plan is: named after Section 529 of the Internal Revenue Code, these investment vehicles allow you to sock away money for education expenses in a tax-advantaged way. Your earnings accumulate tax free and, if used for qualified educatione expenses, withdrawals are tax-free, as well. But choosing a 529 Plan is no simple thing and many investors don’t have a full understanding of how these things work. mint.com give you the basics in this infographic.
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Posted
over 2 years
ago
1 response
Joe D.
said
Great visuals! I saw the original post on Mint.com, also. I always worry about how to save for this when the time comes. I didn't realize that if your 529's value was less than you contributed, you can close the account and claim the loss as an itemized deduction (which I'm sure, unfortunately, many have had to do). I read a great newsletter than is helpful... figured I'd share. Thanks!