How can a 529 plan help me save for my kid's college education? Who offers 529 plans? Are there any special restrictions or conditions on these plans that I should know about?

2 Answers 2


You get to put money away with special tax incentives (ie - no or less taxes to pay) They are state sponsored and therefore pretty reliable, but some states are better than others.

Like with many of these tax incentive type accounts (FSA, Dependent Care Spending Accounts) they are use it or lose it. (In a 529, use it or transfer it). So the money put away is a sunk cost towards education and cannot be repurposed for something else should your kid not want to attend school.



If you're ready to start a 529 account, it makes a big difference which state you choose (some states have excessive fees). It doesn't have to be your own state, but some states give you tax incentives to stay in-state. What you need to do is check out Clark Howard's 529 Guide and check to see if your state is in the "good" list. If not, then pick out a good state.

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