A 529 Plan is a tax-advantaged savings account designed specifically for education expenses. The money you contribute grows tax-free, and when you withdraw it for qualified education expenses—like tuition, books, or housing—you pay no federal taxes on the growth.

Think of it as a retirement account for education: disciplined, tax-smart, and built for the long term.

Why 529s Work So Well

• Tax-free growth: Your contributions compound without annual tax drag.

• Tax-free withdrawals: When used for qualified education expenses, withdrawals are completely tax-free.

• Flexibility: Funds can be used for college, vocational programs, graduate school, or even K–12 tuition (up to certain limits).

• Transferability: If your first child doesn’t use all of the funds, you can transfer the account to another child—or even use it for yourself.

The result? More of your dollars stay invested and working for you instead of being lost to taxes.

Why This Matters

According to the College Board, the average cost of a four-year degree at a public university (including tuition, fees, room, and board) is now over $100,000—and that number continues to rise.

If you start early with a 529, compounding can do much of the heavy lifting. For example, investing $300 per month from your child’s birth to age 18 could grow to over $120,000, assuming a 7% return.

That’s the difference between scrambling for loans and confidently writing tuition checks.

A Practical Action Step

If you do one thing this week, make it this:

1. Research your state’s 529 Plan. Many states offer tax deductions or credits for contributions.

2. Open a 529 account—even if you can only start with a small amount.

3. Set up automatic monthly contributions. As with retirement, consistency is key.

Even if your child is already a teenager, it’s not too late. Every dollar saved is a dollar less you—or they—need to borrow.

A 529 Plan isn’t just about paying for school. It’s about giving the next generation the freedom to pursue education without being burdened by debt. And just like retirement savings, the best time to start is today.