Thoughts Before Funding a 529 College Savings Plan

Watching your college savings grow tax-free with a 529 college savings plan feels great, but failing to follow the rules could come with penalties and taxes that you’ll regret. To avoid that, take a moment to learn the basics.

A guitar case on a street open with some money in it and a hand-written sign that reads "College Tuition."
(Image credit: Getty Images)

College costs have outpaced inflation. Looking back at the last decade, the 10-year historical rate of increase has been approximately 5% per year, according to The College Board. Luckily, there’s a tax-advantaged way to save for these growing college expenses: the 529 college savings plan.

529 basics

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Roxanne Alexander, CFP®, CAIA, AIF®, ADPA®
Senior Financial Adviser, Evensky & Katz/Foldes Financial Wealth Management

Roxanne Alexander is a senior financial adviser with Evensky & Katz/Foldes Financial handling client analysis on investments, insurance, annuities, college planning and developing investment policies. Prior to this, she was a senior vice president at Evensky & Katz working with both individual and institutional clients. She has a bachelor’s in accounting and business management from the University of the West Indies, she received an MBA at the University of Miami in finance and investments.