What Is The Main Advantage Of The 529 Savings Plan?

The main advantage of the 529 savings plan is its tax-advantaged growth, making it a powerful tool for educational savings; WHAT.EDU.VN provides a clear explanation. These plans offer federal tax-free and often state tax-free earnings when used for qualified education expenses. Dive in to discover more about tax benefits, investment options, and financial strategies to maximize your educational savings.

1. What Is The Primary Benefit Of A 529 Savings Plan?

The primary benefit of a 529 savings plan is the potential for tax-free growth and tax-free withdrawals when the funds are used for qualified education expenses. This makes it an attractive option for families looking to save for future education costs.

A 529 savings plan, also known as a qualified tuition program (QTP), offers a way to save for future education expenses with significant tax advantages. According to the IRS, earnings in a 529 plan are not subject to federal income tax and generally not subject to state income tax when used for qualified education expenses. This can result in substantial savings over time compared to other investment accounts where earnings are taxed annually.

1.1 Tax-Advantaged Growth

One of the most compelling features of a 529 plan is its tax-advantaged growth. Contributions to a 529 plan are not tax-deductible at the federal level, but the earnings on those contributions grow tax-deferred. More importantly, withdrawals for qualified education expenses are entirely tax-free at the federal level, and often at the state level as well.

Tax-Deferred Growth: The earnings within the 529 plan accumulate without being subject to annual taxation.
Tax-Free Withdrawals: When the funds are used for qualified education expenses, the withdrawals are free from federal and often state income taxes.

1.2 Qualified Education Expenses

To fully leverage the tax benefits of a 529 plan, it’s essential to understand what qualifies as an education expense. The definition of qualified education expenses is broad, covering many essential costs associated with education.

Tuition and Fees: Expenses for tuition and fees at an eligible educational institution.
Room and Board: Costs for room and board while the beneficiary is enrolled at least half-time.
Books and Supplies: Expenses for books, supplies, and equipment required for enrollment.
Computer Technology: Costs for computer technology, related equipment, and internet access.
K-12 Tuition: Up to $10,000 per year can be used for tuition at elementary or secondary schools.

1.3 Contribution Strategies

While contributions to a 529 plan are not federally tax-deductible, some states offer a state income tax deduction or credit for contributions made to their own state’s 529 plan. Understanding these state-specific benefits can further enhance the attractiveness of a 529 plan.

Front-Loading: Making a large initial contribution can maximize the potential for tax-free growth over time.
Regular Contributions: Setting up a regular contribution schedule can help consistently grow the account.
Gift Tax Exclusion: Contributions to a 529 plan are considered gifts, but they qualify for the annual gift tax exclusion ($17,000 per individual in 2023).

1.4 Flexibility and Control

529 plans offer considerable flexibility and control to the account owner. This includes the ability to change the beneficiary, transfer funds to another family member, and adjust the investment options within the plan.

Beneficiary Changes: The account owner can change the beneficiary of the 529 plan to another qualifying family member.
Investment Options: Most 529 plans offer a range of investment options, from conservative to aggressive, allowing the account owner to tailor the investment strategy to their risk tolerance and time horizon.
Control of Funds: The account owner maintains control over the funds in the 529 plan, even after the beneficiary reaches college age.

1.5 Estate Planning Benefits

529 plans can also provide estate planning benefits. Contributions to a 529 plan are considered completed gifts, effectively removing those assets from the contributor’s estate. Additionally, a special election allows contributors to treat a large contribution (up to five times the annual gift tax exclusion) as if it were made over a five-year period.

Gift Tax Exclusion: Using the annual gift tax exclusion to reduce the size of the taxable estate.
Five-Year Election: Contributing a lump sum and treating it as if it were made over five years to maximize tax benefits.

By understanding and utilizing these advantages, families can make the most of a 529 savings plan to secure their children’s educational future. Consider these factors and explore the potential of a 529 plan to enhance your savings strategy for education expenses. And remember, WHAT.EDU.VN is here to provide answers if any questions arise as you plan.

2. What Are The Different Types Of 529 Plans Available?

There are two main types of 529 plans: savings plans and prepaid tuition plans. Each type offers different benefits and may be more suitable depending on your financial goals and risk tolerance. Understanding the nuances of each type is crucial in selecting the right plan for your needs.

2.1 529 Savings Plans

529 savings plans are investment accounts that allow you to save for qualified education expenses. These plans are similar to 401(k)s or Roth IRAs, but are specifically designed for education savings. According to the Securities and Exchange Commission (SEC), 529 savings plans offer a variety of investment options, including mutual funds, ETFs, and age-based portfolios.

Investment Flexibility: 529 savings plans offer a range of investment options to suit different risk tolerances and time horizons.
Tax Benefits: Earnings grow tax-deferred, and withdrawals are tax-free when used for qualified education expenses.
Wide Range of Expenses: Funds can be used for tuition, fees, room and board, books, and other qualified education expenses.

2.2 Prepaid Tuition Plans

Prepaid tuition plans allow you to purchase tuition credits at today’s prices for future use at eligible colleges and universities. These plans are typically sponsored by state governments and may have residency requirements. According to the College Savings Plans Network (CSPN), prepaid tuition plans offer a hedge against tuition inflation.

Hedge Against Inflation: Lock in current tuition rates to protect against future increases.
State Sponsorship: Typically sponsored by state governments and may have residency requirements.
Limited Flexibility: Funds can only be used at participating colleges and universities.

2.3 Key Differences

Understanding the key differences between 529 savings plans and prepaid tuition plans is essential in determining which type is the better fit for your financial situation.

Feature	529 Savings Plan	Prepaid Tuition Plan
Investment Options	Mutual funds, ETFs, age-based portfolios	Tuition credits at participating institutions
Tax Benefits	Tax-deferred growth, tax-free withdrawals	Tax-free growth and withdrawals
Usage Flexibility	Wide range of qualified education expenses	Limited to tuition at participating institutions
Inflation Protection	Investment returns may outpace tuition inflation	Locks in current tuition rates
State Residency	Not typically required	May have residency requirements
Risk and Return	Market risk; potential for higher returns	Low risk; returns tied to tuition rates
Account Control	You manage investments	State manages the plan
Portability	Funds can be used at any eligible institution	Limited to participating institutions
Refund Options	May have penalties or limitations	May have penalties or limitations
Investment Management	Self-directed or professionally managed options	No investment management; returns are predetermined

2.4 Factors to Consider

When choosing between a 529 savings plan and a prepaid tuition plan, consider the following factors:

Financial Goals: Determine your goals for education savings and how each plan aligns with those goals.
Risk Tolerance: Assess your comfort level with investment risk and potential market fluctuations.
College Preferences: Consider whether the beneficiary is likely to attend a participating college or university in a prepaid tuition plan.
State Residency: Check the residency requirements and tax benefits offered by your state’s 529 plans.
Flexibility: Evaluate the flexibility of each plan in terms of investment options, beneficiary changes, and usage of funds.

2.5 Hybrid Approaches

Some families choose to utilize both types of 529 plans to maximize their education savings strategy. For example, they may invest in a 529 savings plan for general education expenses and a prepaid tuition plan to cover tuition costs at a specific institution.

Diversification: Combining both types of plans can provide diversification and balance.
Customization: Tailoring the savings strategy to meet specific education goals and financial circumstances.

By understanding the features, benefits, and limitations of both 529 savings plans and prepaid tuition plans, you can make an informed decision and optimize your education savings strategy. For further guidance and answers, remember to visit WHAT.EDU.VN for free advice.

3. What Are The Contribution Limits For A 529 Plan?

Contribution limits for a 529 plan vary depending on the state and the type of plan. Understanding these limits is essential for maximizing the tax benefits and avoiding any potential penalties. It’s crucial to know both the annual and lifetime contribution limits to effectively plan your education savings.

3.1 Annual Contribution Limits

The annual contribution limit for a 529 plan is tied to the federal gift tax exclusion. For 2023, the annual gift tax exclusion is $17,000 per individual. This means that an individual can contribute up to $17,000 per beneficiary without incurring gift tax consequences. According to the IRS, contributions exceeding this amount may be subject to gift tax.

Gift Tax Exclusion: Contributions up to $17,000 per beneficiary per year are exempt from gift tax.
Married Couples: Married couples can each contribute up to $17,000 per beneficiary, for a total of $34,000 per year.

3.2 Five-Year Election

A special provision allows contributors to make a lump-sum contribution of up to five times the annual gift tax exclusion in a single year, effectively front-loading the 529 plan. This contribution is then treated as if it were made over a five-year period. For 2023, this means an individual can contribute up to $85,000 ($17,000 x 5) in a single year.

Lump-Sum Contribution: Contribute up to five times the annual gift tax exclusion in one year.
Five-Year Averaging: The contribution is treated as if it were made over five years for gift tax purposes.
Considerations: If the contributor dies within the five-year period, a portion of the contribution may be included in their estate.

3.3 Lifetime Contribution Limits

While there is an annual contribution limit, 529 plans also have lifetime contribution limits, which vary by state. These limits typically range from $235,000 to $540,000 per beneficiary. According to the College Savings Plans Network (CSPN), most states set the lifetime limit high enough that it is unlikely to be reached by most contributors.

State-Specific Limits: Lifetime contribution limits vary by state, so it’s essential to check the specific limits for your state’s 529 plan.
High Threshold: Most states set the lifetime limit high enough that it is unlikely to be reached by most contributors.

3.4 Impact of Over-Contribution

Exceeding the annual or lifetime contribution limits can have significant tax consequences. Contributions exceeding the annual gift tax exclusion may be subject to gift tax, and contributions exceeding the lifetime limit may result in penalties and loss of tax benefits.

Gift Tax: Contributions exceeding the annual gift tax exclusion may be subject to gift tax.
Loss of Tax Benefits: Contributions exceeding the lifetime limit may result in penalties and loss of tax benefits.

3.5 Strategies to Maximize Contributions

To effectively maximize contributions to a 529 plan, consider the following strategies:

Early Start: Start saving early to take advantage of the power of compounding and maximize tax-free growth.
Regular Contributions: Set up a regular contribution schedule to consistently grow the account.
Lump-Sum Contributions: Consider making lump-sum contributions when possible, especially if you can utilize the five-year election.
Gift Contributions: Encourage family members and friends to contribute to the 529 plan as gifts for birthdays, holidays, and other special occasions.

3.6 State-Specific Rules

Contribution limits and tax benefits can vary significantly by state, so it’s important to understand the specific rules for your state’s 529 plan. Some states offer state income tax deductions or credits for contributions made to their own state’s 529 plan.

State Income Tax Benefits: Some states offer state income tax deductions or credits for contributions to their 529 plan.
Residency Requirements: Some states may have residency requirements for certain 529 plan benefits.

By understanding the contribution limits and implementing effective strategies, you can maximize the tax benefits of a 529 plan and secure your child’s educational future. Always verify the specific rules and limits for your state’s 529 plan. And remember, WHAT.EDU.VN is always here to address any questions about college planning.

4. Can A 529 Plan Be Used For K-12 Tuition?

Yes, a 529 plan can be used for K-12 tuition expenses, up to a certain limit per year. This expanded use of 529 plans provides additional flexibility for families seeking to fund education at various levels. Understanding the specifics is crucial for effective planning.

4.1 Expanded Use of 529 Plans

The Tax Cuts and Jobs Act of 2017 expanded the use of 529 plans to include K-12 tuition expenses. Prior to this, 529 plans were primarily used for higher education expenses. According to the IRS, families can now withdraw up to $10,000 per year, per beneficiary, from a 529 plan to pay for tuition at elementary or secondary public, private, or religious schools.

Tax Cuts and Jobs Act: Expanded the use of 529 plans to include K-12 tuition expenses.
Annual Limit: Families can withdraw up to $10,000 per year, per beneficiary, for K-12 tuition.

4.2 Qualified Expenses for K-12 Tuition

When using a 529 plan for K-12 tuition, it’s important to understand what qualifies as a tuition expense. The funds must be used for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.

Tuition Expenses: Funds must be used for tuition expenses at eligible schools.
Eligible Schools: Includes public, private, and religious elementary and secondary schools.
Non-Qualified Expenses: Funds cannot be used for room and board, books, or other expenses related to K-12 education.

4.3 State Tax Implications

While the federal government allows the use of 529 plans for K-12 tuition, some states may have different rules. It’s important to check with your state’s 529 plan to understand the state tax implications of using the funds for K-12 tuition.

State Rules Vary: Some states may not conform to the federal rules and may treat K-12 tuition withdrawals as non-qualified expenses.
State Tax Deduction: Some states may offer a state income tax deduction for contributions to a 529 plan, but only if the funds are used for higher education expenses.

4.4 Impact on Higher Education Savings

Using a 529 plan for K-12 tuition can impact the amount of savings available for higher education. Families should carefully consider the potential impact on their ability to fund future college expenses before using the funds for K-12 tuition.

Reduced Savings: Using the funds for K-12 tuition can reduce the amount of savings available for college.
Opportunity Cost: Consider the potential investment growth that could have been earned if the funds were left in the 529 plan for higher education.

4.5 Strategies for Using 529 Plans for K-12 Tuition

If you plan to use a 529 plan for K-12 tuition, consider the following strategies:

Prioritize Higher Education: Prioritize saving for higher education and only use the funds for K-12 tuition if you have sufficient savings.
Maximize Contributions: Maximize contributions to the 529 plan to offset the withdrawals for K-12 tuition.
Consult a Financial Advisor: Consult a financial advisor to develop a comprehensive education savings plan that meets your financial goals.

4.6 Considerations

Before using a 529 plan for K-12 tuition, consider the following factors:

State Tax Implications: Check the state tax implications of using the funds for K-12 tuition.
Impact on Higher Education Savings: Consider the impact on your ability to fund future college expenses.
Eligibility Requirements: Ensure that the school meets the eligibility requirements for 529 plan withdrawals.

By understanding the rules and considerations, you can make an informed decision about using a 529 plan for K-12 tuition expenses. WHAT.EDU.VN stands ready to provide additional clarity on these topics if you need it.

5. What Happens If The 529 Plan Is Not Used For Education?

If a 529 plan is not used for qualified education expenses, the earnings portion of the withdrawal will be subject to federal income tax and a 10% penalty. Understanding the implications of non-qualified withdrawals is essential for making informed decisions about your 529 plan. It’s important to explore all options before taking a non-qualified withdrawal.

5.1 Tax Implications of Non-Qualified Withdrawals

When funds are withdrawn from a 529 plan for non-qualified expenses, the earnings portion of the withdrawal is subject to federal income tax at the beneficiary’s tax rate. Additionally, a 10% penalty is applied to the earnings portion of the withdrawal. According to the IRS, the penalty is waived in certain situations, such as the beneficiary’s death or disability.

Federal Income Tax: The earnings portion of the withdrawal is subject to federal income tax.
10% Penalty: A 10% penalty is applied to the earnings portion of the withdrawal.
Penalty Waivers: The penalty is waived in certain situations, such as the beneficiary’s death or disability.

5.2 Qualified vs. Non-Qualified Expenses

Understanding the difference between qualified and non-qualified expenses is crucial for avoiding penalties and maximizing the tax benefits of a 529 plan.

Expense Type	Definition
Qualified Expenses	Expenses for tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Also includes room and board expenses if the beneficiary is enrolled at least half-time.
Non-Qualified Expenses	Any expenses that do not meet the definition of qualified education expenses. This includes expenses for travel, entertainment, and other personal expenses.
Special Cases	Up to $10,000 per year can be used for tuition at elementary or secondary schools (K-12). Certain apprenticeship programs also qualify.

5.3 Options If The Beneficiary Doesn’t Attend College

If the beneficiary decides not to attend college, there are several options for the funds in the 529 plan:

Change the Beneficiary: Change the beneficiary to another qualifying family member, such as a sibling, parent, or other relative.
Hold for Future Education: Hold the funds for future education expenses, such as graduate school or vocational training.
Withdraw the Funds: Withdraw the funds and pay the applicable taxes and penalties.
Roll Over to Another 529 Plan: Roll over the funds to another 529 plan for the same beneficiary or another qualifying family member.

5.4 Changing the Beneficiary

Changing the beneficiary of a 529 plan is a tax-free transaction as long as the new beneficiary is a member of the original beneficiary’s family. According to the IRS, a member of the family includes:

Spouse
Sibling
Step-Sibling
Parents
Grandparents
Aunts and Uncles
Nieces and Nephews
First Cousins

5.5 Rolling Over the Funds

Rolling over the funds to another 529 plan for the same beneficiary or another qualifying family member is also a tax-free transaction. This allows you to consolidate multiple 529 plans or transfer the funds to a plan with better investment options.

Tax-Free Transaction: Rolling over the funds to another 529 plan is a tax-free transaction.
Investment Options: Transfer the funds to a plan with better investment options.
Consolidation: Consolidate multiple 529 plans into a single account.

5.6 Strategies to Avoid Non-Qualified Withdrawals

To avoid non-qualified withdrawals and maximize the tax benefits of a 529 plan, consider the following strategies:

Accurate Expense Tracking: Keep accurate records of qualified education expenses to ensure that withdrawals are used for eligible purposes.
Conservative Savings Estimates: Save conservatively to avoid accumulating excess funds in the 529 plan.
Beneficiary Planning: Plan for potential beneficiary changes and ensure that the funds can be used for another qualifying family member if necessary.

5.7 Considerations

Before taking a non-qualified withdrawal from a 529 plan, consider the following factors:

Tax Implications: Understand the tax implications of non-qualified withdrawals, including federal income tax and penalties.
Alternative Options: Explore alternative options, such as changing the beneficiary or rolling over the funds to another 529 plan.
Long-Term Financial Goals: Consider the impact on your long-term financial goals and education savings strategy.

By understanding the implications of non-qualified withdrawals and exploring alternative options, you can make informed decisions about your 529 plan. If you have questions or need direction, WHAT.EDU.VN is available to help you plan and get your questions answered.

6. How Does A 529 Plan Affect Financial Aid Eligibility?

A 529 plan can have a minimal impact on financial aid eligibility, particularly if the account is owned by a parent. Understanding how these plans are treated in financial aid calculations is essential for maximizing aid opportunities. Proper planning can help you balance savings and aid eligibility.

6.1 Impact on the Expected Family Contribution (EFC)

The Expected Family Contribution (EFC) is a measure of how much a family is expected to contribute to college costs, and it’s used to determine financial aid eligibility. According to the U.S. Department of Education, 529 plans owned by a parent are considered parental assets and are assessed at a maximum rate of 5.64% in the EFC calculation.

Parental Asset: 529 plans owned by a parent are considered parental assets.
Assessment Rate: Parental assets are assessed at a maximum rate of 5.64% in the EFC calculation.
Minimal Impact: The impact on financial aid eligibility is generally minimal.

6.2 Student-Owned 529 Plans

If the 529 plan is owned by the student, it is considered a student asset and is assessed at a higher rate of 20% in the EFC calculation. However, student assets have a larger impact on financial aid eligibility.

Student Asset: 529 plans owned by the student are considered student assets.
Assessment Rate: Student assets are assessed at a rate of 20% in the EFC calculation.
Greater Impact: Student assets have a greater impact on financial aid eligibility.

6.3 Grandparent-Owned 529 Plans

529 plans owned by a grandparent or other third party are not reported as assets on the Free Application for Federal Student Aid (FAFSA). However, withdrawals from these accounts are treated as untaxed income to the student, which can reduce financial aid eligibility.

Not Reported on FAFSA: 529 plans owned by a grandparent or other third party are not reported as assets on the FAFSA.
Untaxed Income: Withdrawals from these accounts are treated as untaxed income to the student.
Reduced Eligibility: Untaxed income can reduce financial aid eligibility.

6.4 Strategies to Minimize Impact on Financial Aid

To minimize the impact of a 529 plan on financial aid eligibility, consider the following strategies:

Parental Ownership: Have the parent own the 529 plan to take advantage of the lower assessment rate.
Delay Grandparent Withdrawals: Delay withdrawals from grandparent-owned 529 plans until after the FAFSA has been filed.
Coordinate with Financial Aid Office: Coordinate with the financial aid office to understand how 529 plan withdrawals will be treated.

6.5 FAFSA Simplification Act

The FAFSA Simplification Act, which goes into effect in the 2024-2025 academic year, will streamline the FAFSA process and change how financial aid eligibility is determined. It removes the question about cash support, which may impact how grandparent-owned 529 plans are treated.

Streamlined Process: The FAFSA Simplification Act will streamline the FAFSA process.
Cash Support Question: The question about cash support will be removed, which may impact how grandparent-owned 529 plans are treated.

6.6 Considerations

Before making decisions about 529 plan ownership and withdrawals, consider the following factors:

Financial Aid Eligibility: Understand how 529 plans are treated in financial aid calculations.
FAFSA Simplification Act: Stay informed about changes to the FAFSA process and how they may impact financial aid eligibility.
Long-Term Financial Goals: Consider the impact on your long-term financial goals and education savings strategy.

By understanding how 529 plans affect financial aid eligibility and implementing effective strategies, you can maximize aid opportunities and secure your child’s educational future. Always consult with a financial advisor for personalized guidance. And remember, WHAT.EDU.VN is always available to answer your questions!

7. What Are The Investment Options Available In A 529 Plan?

529 plans offer a variety of investment options to suit different risk tolerances and time horizons. Understanding the available options and how to allocate your investments is crucial for maximizing returns. It’s important to review and adjust your investment strategy periodically.

7.1 Types of Investment Options

529 plans typically offer the following types of investment options:

Age-Based Portfolios: These portfolios automatically adjust the asset allocation over time, becoming more conservative as the beneficiary approaches college age.
Static Portfolios: These portfolios maintain a fixed asset allocation, allowing you to choose a risk level that aligns with your investment goals.
Individual Mutual Funds: These funds invest in a specific asset class, such as stocks, bonds, or real estate.
Exchange-Traded Funds (ETFs): These funds trade on stock exchanges and offer exposure to a basket of securities.
Guaranteed Options: These options offer a guaranteed rate of return, providing a low-risk investment option.

7.2 Age-Based Portfolios

Age-based portfolios are designed to simplify the investment process by automatically adjusting the asset allocation over time. As the beneficiary gets closer to college age, the portfolio becomes more conservative to protect against market volatility.

Automatic Adjustments: The asset allocation is automatically adjusted over time.
Conservative Approach: The portfolio becomes more conservative as the beneficiary approaches college age.
Convenient Option: This is a convenient option for investors who prefer a hands-off approach.

7.3 Static Portfolios

Static portfolios maintain a fixed asset allocation, allowing you to choose a risk level that aligns with your investment goals. These portfolios typically offer a range of risk levels, from conservative to aggressive.

Fixed Allocation: The asset allocation remains fixed over time.
Range of Risk Levels: Choose a risk level that aligns with your investment goals.
More Control: This option provides more control over the investment strategy.

7.4 Individual Mutual Funds and ETFs

Individual mutual funds and ETFs allow you to invest in specific asset classes, such as stocks, bonds, or real estate. This option provides the most control over the investment strategy but requires more research and expertise.

Specific Asset Classes: Invest in specific asset classes, such as stocks, bonds, or real estate.
More Control: This option provides the most control over the investment strategy.
Requires Expertise: This option requires more research and expertise.

7.5 Guaranteed Options

Guaranteed options offer a guaranteed rate of return, providing a low-risk investment option. These options are typically offered by state-sponsored 529 plans and may have restrictions on withdrawals.

Guaranteed Return: This option offers a guaranteed rate of return.
Low-Risk: This is a low-risk investment option.
Withdrawal Restrictions: These options may have restrictions on withdrawals.

7.6 Factors to Consider When Choosing Investment Options

When choosing investment options for a 529 plan, consider the following factors:

Risk Tolerance: Assess your comfort level with investment risk and potential market fluctuations.
Time Horizon: Consider the amount of time until the beneficiary will need the funds for college.
Investment Goals: Determine your goals for the 529 plan and how each investment option aligns with those goals.
Fees and Expenses: Review the fees and expenses associated with each investment option.

7.7 Diversification

Diversification is a key principle of investing that involves spreading your investments across different asset classes to reduce risk. When investing in a 529 plan, consider diversifying your investments across different asset classes and investment options.

Spread Investments: Spread your investments across different asset classes to reduce risk.
Asset Allocation: Choose an asset allocation that aligns with your risk tolerance and time horizon.

By understanding the available investment options and considering your risk tolerance and time horizon, you can create a diversified investment portfolio that aligns with your goals. Always review and adjust your investment strategy periodically to ensure that it continues to meet your needs. Got any questions on how to invest your 529 plan wisely? Just ask what.edu.vn.

8. What Are The Fees Associated With A 529 Plan?

Understanding the fees associated with a 529 plan is essential for evaluating the overall cost and potential returns. Fees can vary widely depending on the type of plan and the investment options you choose. Knowing what to look for can save you money in the long run.

8.1 Types of Fees

529 plans may charge the following types of fees:

Program Management Fees: These fees cover the costs of administering the 529 plan,