Industry experts agree that 529 Plans are a good option for investing in the future, so what exactly is a 529 Plan?
A 529 plan is designed to help families set-aside funds for future college costs. Operated by a state or educational institution, these plans are named after Section 529 of the Internal Revenue Service Code that created these types of savings plans. Section 529 plans are open to anyone, regardless of income level, and earnings are not subject to federal income tax when used for qualified higher education expenses.
Interested in learning more about 529 plans?
Check out this interactive guide:
You can get started saving with a 529 Plan in a few easy steps:
First, consider who you’re saving for. You can name one beneficiary per 529 account. If you’re saving for multiple beneficiaries, we recommend opening a separate account for each.
Think about how much you would like to save and how long you have before it’s time for college. Our savings calculator can help you decide how much you will need when it’s time for college.
Decide how you want to invest your contributions. 529 Plans offer a variety of investment options, typically made up of mutual funds. You can even choose an Age-Based investment option which automatically shifts from aggressive to conservative as your beneficiary nears college age.
Next, choose how you are going to reach your savings goal. You can choose to make automatic contributions each pay period, contribute a large lump sum or designate special occasions for contributions.
Manage your account online by make additional contributions and reallocating your investment options up to two times per calendar year.
Watch your money work for you while enjoying tax-free growth!
Finally, when it’s time for college, withdraw your funds for tuition, books, room & board and more. With TNStars, you can use your money at any school that accepts federal financial aid including:
- Private Colleges
- Community Colleges
- Technical Schools
- Out-of-State Schools