Avoid 529 Plan Penalties

If we open a 529 plan, what happens if our daughter decides not to go to college?

If we open a 529 plan, whether it's in our state of residence or not, can we use the money for any college in the country? And what happens if our 2-year-old daughter decides not to go to college at all?

Yes, you can use the money at any college in the U.S., some technical schools, and quite a few foreign universities, too. Go to the U.S. Department of Education's federal school code search tool to make sure a school is included.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.