What is a 529 college savings plan? An economist explains
A 529 plan can pay for up to $10,000 a year for tuition at K-12 schools. MoMo Productions/DigitalVision via Getty Images Robert H. Scott III , Monmouth University The college savings plan known as a “529” is often touted as a smart way to save for a child’s college education. But these plans involve more than just putting away money for college. Here, Robert H. Scott III , an expert on 529s , shines light on how the plans work. What are 529 plans? A 529 college savings plan is an investment account that families can open to save for college by investing money that grows tax-free. The name of the account comes from Section 529 of the U.S. tax code. The money can be used for qualifying education expenses , such as tuition, room and board, textbooks, computers and travel. People can add money to a 529 account whenever they like, or set up automatic withdrawals from their checking account. At the end of 2020, Americans had invested a total of US$...