A Primer on 529 Plan Benefits

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With tuition increasing at a steady pace and student loan debt reaching record highs, many parents struggle finding ways to lower the price of higher education. But a 529 college savings plan can help. These tax-friendly savings vehicles offer a range of perks. Below, we explore 529 plan benefits in detail. But first, we’ll explain exactly what they are.

What are 529 plans?

529 college savings plans are designed to help you save up to pay college expenses like tuition and mandatory educational expenses. Direct 529 plans function much like 401(k) accounts. You simply contribute toward a professionally managed investment portfolio.

Some of these investment plans feature the guidance of a financial advisor. This professional can help you create a unique savings strategy based on your financial situation to make the most out of 529 plan benefits. In addition, a 529 prepaid tuition plan allows you to lock in current tuition prices and essentially purchase them in advance.

529 plan benefits abound no matter which type of plan you choose. Read on to get a full understanding of what 529 plans can do for you.