Why Save for College Early?
College costs have historically risen at a rate faster than general inflation. By starting to save when your child is young, you give your investments more time to grow through the power of compound interest.
Even small, regular contributions can make a significant dent in future tuition, room, and board expenses.
Understanding 529 Plans
A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. There are two types: prepaid tuition plans and education savings plans.
- Tax-deferred growth on investments
- Tax-free withdrawals for qualified education expenses
- Contributions may be state tax-deductible in some states
- High contribution limits compared to other accounts