Get Multiple Event Savings Plan

There are two different types of 529 savings plans you can enroll in: A direct-sold 529 savings plan is 529 savings plan that is sold directly by a state, financial institution. ... An advisor-sold 529 savings plan is a 529 savings plan that is sold through an investment firm.

Ideally, the best time to start a college fund is when your child is born. With compound interest and regular investments made monthly or yearly, the funds have an opportunity to grow over a longer period of time, and you don't need to put aside as much each month or year to reach your savings goal.

529 plan benefits: They grow tax-free Earnings on 529 accounts are not treated as taxable income. Let's say, for example, that you save $1,000 in a 529 investment account, which grows by 5% in a year to $1,050. ... It allows beneficiaries of 529 funds to use leftover money to repay up to $10,000 of their student loans.

While a 529 plan remains a great way to save for college or private school, it lacks the flexibility of other accounts because you can only make tax- and penalty-free withdrawals for educational costs. You're basically earmarking this sum of money for education only.

529 plans are sponsored by the states. Every state has a plan; some states have multiple plans. The investment options are different in each plan. When you set up a 529 plan account for a child, you first have to decide which state's plan you are going to use.

To pick the best 529 plan for you: Start by considering your home state's direct-sold 529 plan, if your state offers a state income tax break and other benefits for state residents. Also consider the direct-sold 529 plans of low-fee states and the 529 plans with the top overall ratings.

For most individuals, there is never an ideal time to start saving for college. The key is to avoid procrastinating and open a 529 plan as soon as you have someone to save for. If parents have their first child at age 26, the best time to open a 529 plan would be between the ages of 25 and 34.

While it's technically possible to use one 529 plan for multiple children, rather than making things simpler, it actually makes them more complicated. From beneficiary rules to investment strategies to ultimate fairness, having a separate 529 account for each child is the preferred way to go.

There are two types of 529 plans: prepaid tuition plans and education savings plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan. In addition, a group of private colleges and universities sponsor a prepaid tuition plan.