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How to Use a 529 Plan to Pay for College

Find out how using a 529 plan makes it easy to pay for the college of your dreams.

By
Laura Adams, MBA,
August 7, 2013
Episode #322

Page 3 of 3

A prepaid 529 plan allows you to pay future tuition at today’s rates and can be administered by states or institutions—but aren’t available in every state. The idea is that college costs rise year after year, so locking in a rate now will save money in the future.

A 529 savings plan is very different because your account balance is based on the performance of the underlying investments that you choose, similar to a retirement account. These types of 529s can only be administered by states and are available in every one. You can choose a variety of investment options from low-risk CDs to higher-risk growth mutual funds—so don’t think you have to be a high roller to opt for the savings plan.

Each 529 plan has different features and benefits, so always do your homework before enrolling in one. Collegesavings.org and Savingforcollege.com have tools to compare and shop for the best 529 plan for you.

How to Pay for College

Once your 529 account is open, why not invite friends and family via email, social media, or a dedicated URL for paper invitations to make contributions for special events? Check out GradSave, a free online college savings registry that you can link to your child’s 529 plan. Users can even buy gift cards to be redeemed online and deposited into the child’s account.

Saving for college has never been easier. So get started by making a plan to set aside regular contributions to a 529 plan. No matter if you contribute $10 a month or $1,000 a month, the sooner you get started, the easier it will be for you and your family to pay for college.

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