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With Valentine’s Day approaching and expressions of love in the air, it’s a fitting time to reflect on and celebrate the love and care you have demonstrated for the children in your life by planning ahead for their futures. There’s no doubt that they are at the very heart of your financial plan.

Among the greatest gifts you can give to those you love are the tools they need to pursue their dreams – with education being among the most valuable. And, if the pursuit of post-secondary education is in the not-so-distant future, it’s a fitting time to consider just how much there is to love about your 529 college savings plan at this important juncture.

Five 529 Factors You Will Love:

1. Tax-free withdrawals

As you may recall, 529 plan investments grow tax-deferred – meaning, unlike other forms of saving and investing, no tax is owed on the earnings as the account grows in value. On top of that, when withdrawals are taken and used for a wide range of educational expenses at a wide range of qualified institutions, those earnings are never taxed. Tax-free withdrawals provide more money for college and that is truly something to love!

2. Countless educational options and covered expenses

529 plans allow for educational pursuits that are as unique as your child. Withdrawals from 529 college savings plan accounts can be used at a wide range of qualified institutions across the U.S. and at some international schools as well that are eligible to receive federal financial aid. Whether your child decides to attend a two-year or a four-year college or university, vocational or professional school or decides to pursue a registered apprenticeship, graduate, or even post-graduate program, 529 plan investments are there to help.

Beyond this, the types of expenses that can be covered in connection with attendance at qualified institutions include tuition, mandatory fees, books, supplies and equipment, room and board (if the student is enrolled at least half time), computers, software, and peripheral equipment, and special needs services as well. 529 withdrawals can also be used to cover expenses that are required for participation in registered apprenticeship programs.*

The wide range of schools and expenses for which 529 plan accounts can be used is something both you and your child will love!

3. Flexibility to accommodate a change in plans

Students’ plans can change, and 529 plans are flexible enough to accommodate those changes. For instance, if your child chooses to defer acceptance and take a gap year instead, your funds can remain in the account until your child needs them. You can rest assured that there are no beneficiary age limits or time limits in which 529 funds need to be used.

Likewise, if your child chooses to live off-campus or at home while attending school at least half time rather than living on campus and utilizing on-campus dining services, 529 plan withdrawals can be used to cover living expenses incurred, up to their actual cost or the school’s published cost of attendance allowance for room and board, whichever is less.

And in the rare event that the child for whom you originally set up the account chooses to not pursue any form of eligible post-secondary education, you can change your account beneficiary to another member of the original beneficiary’s family with no penalty or cost. This could be a sibling, spouse, cousin, aunt, uncle, stepchild, niece, nephew, and so on. You, as the account owner, can even use the money for your own education or save it for your child’s children.

The flexibility of 529 plans is another aspect to love!

4. Still time to save and invest more

Wherever you are on your savings and investing journey, there is still time to continue to save and invest even if college is near. You, along with friends and family, can contribute up to and throughout the college years. With plenty of occasions to celebrate over the days and years ahead, friends and extended family may welcome the opportunity to contribute toward the 529 account of a child they love for birthdays, holidays, and other milestones. There are very easy ways to invite loved ones to do so.

The ability to continue to save and invest while your child is in college coupled with the ease with which you can invite friends and family to join in your savings journey is something additional to love about 529 plans!

5. Peace of mind and less debt

Having money earmarked for higher education provides you with peace of mind. It also enables your student to more fully focus on studies and extracurricular interests without the stress associated with scrambling to cover costs. Whatever amount you accumulate in your 529 plan account may be that much less that your child may need to borrow and repay with interest.

Less stress and less debt are certainly something you and your child will love as well!


*Withdrawals for registered apprenticeship programs can be withdrawn free from federal and California income tax.  If you are not a California taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.


Patricia A. Roberts is a motivational speaker, writer, and veteran of the college savings industry. She has led college savings initiatives at premier financial services organizations like Merrill Lynch and AllianceBernstein, and has authored Route 529: A Parent’s Guide to Saving for College and Career Training with 529 Plans. In her current role as COO at Gift of College, she promotes 529 plans as a financial wellness benefit in the workplace.