What is a 529?

Tax-free education savings explained.
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Saving With Benefits

A 529 plan is a college savings plan that offers tax and financial aid benefits which help everyday families save for education costs. The plan invests in mutual funds that grow in value over time, and if the funds are used for qualified education expenses, you don’t have to pay taxes on the investment gains. A 529 plan may also be used to save and invest for K-12 tuition. Much like a Roth IRA, contributions to a 529 plan are post-tax and are not deductible from federal income taxes. The 529 program was created in 1996 as part of the Small Business Job Protection Act. The numbers ‘529’ come from section 529 in the IRS tax code, which was created to incentivize taxpayers to save for college by allowing their earnings to accumulate tax-free.

Want To Learn More?

We have many resources for you to learn about 529 plans. Watch the video above or click on a topic below to read more on our blog:
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529 Plans

How Do Employer-Sponsored 529 Plans Work?

What Is An Employer-Sponsored 529 Plan? Employer-sponsored 529 plans are tax-advantaged education savings accounts offered to employees through their workplace benefits program.  529 plans can

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Frequently Asked Questions

Why should I get started with SavvyFi?
Student debt is over $1.7 Trillion dollars. Many people want to save for college but don’t know where to start. With SavvyFi, all you need is some basic information about you and your future grad to open a 529 college savings account. Our unique features like gifting and cashback rewards help your grad look forward to a future without debt.
Who can open a 529 plan?
Anyone! You can open an account for your child, grandchild, niece, nephew, and even the neighbor’s kid – as long as you have their social security number. If you’re looking for a head start on your savings, you can even open an account for yourself and transfer it to your child at a later date.
Can you tell me more about the account?

Your savings will be invested in a Vanguard age-based option through my529’s 529 program. Vanguard’s age-based option starts out with higher growth potential when your future grad is younger and automatically reduces risk as your child approaches college age.

 

What if my child does not attend college?

If your child does not attend college, there are many options for what you can do with your college savings. You can transfer your 529 account to another family member, use the funds for your own education or withdraw the funds with a 10% penalty on your earnings to give your child a head start on other important financial goals.