First of all, what is a 529 account really? And what advantages will it give me? These are good questions which I will attempt to answer today. A 529 account is a state sponsored plan that allows families to save money towards their children’s (or their own) college education, while being able to invest the money and gain a market return. The best part of the plan is that the money grows on a tax free basis, as long as it is used for education.

The 529 account can be used at any accredited college or university, on anything from tuition and fees, to books, room and board, supplies, etc. needed for college. As I mentioned before, each state has different rules surrounding the 529 account, but you can shop any state’s plan, to suit your needs. The only negative consideration with using a different state’s plan is you may have to pay higher commissions with less investment options available under the proposed 529 account. Let’s take a closer look at some of the key benefits and problems:

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