06/26/2015

529 SAVINGS PLAN

State-sponsored program designed to help parents and others finance a child’s college expenses. Subject to contribution limitations and investment guidelines. Anyone can contribute, regardless of income level, and the money is generally invested in a portfolio of stocks, bonds or mutual funds. Withdrawals are federal income tax free if used for qualified higher education expenses; withdrawals for non-educational purposes will trigger federal income taxes and a 10 percent tax penalty.

Contributor: Cara Ross