Watching Your Wallet: Benefits of 529 College Savings Plan
BATON ROUGE, La. (WAFB) - A 529 college savings plan is a great way to put money aside for your child’s college expenses but what happens to that money if your child changes their mind about college?
The good news is a 529 plan can be used in other ways.
If you want to save money for your child’s college costs, a 529 plan is a great idea. Plus, it’s very versatile, too.
Here’s the concern - you start saving when your child is two years old, then when they’re college age, they decide a four-year college isn’t what they want to do. Is your money wasted? Not at all.
RELATED: Expert shares creative way to fund your child’s 529 plan
The savings from the 529 plan can be used for trade schools. Just make sure the school has a federal school code. The savings can be used for an apprenticeship even, if it’s registered.
For example, your child wants to take a year off before college, often called a gap year. Sometimes, colleges offer gap-year programs that offer college credit for your child to backpack through Europe. That might be covered by your 529.
If going to college is out, the money can be transferred to a sibling if the account is in the parent’s name. The 529 savings can even be used to pay off loans now. That’s a new development. And another new option is some 529 savings can be rolled over to a Roth IRA to help start retirement savings in certain circumstances.
If you’re looking to save money for your child’s college costs, take a close look at everything a 529 plan offers. It could be the perfect savings vehicle for you and your child.
Talk to a financial advisor to find out some more information to see if it’s a right fit for you.
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