The 401(k) of College Savings: 529 Plan Must-Knows
401(k) plans for retirement and 529 plans for college savings share some broad characteristics: Put money in today, get a tax deduction, and allow funds to grow tax-deferred for a specified purpose in the future. Still, those who benefit most from 529 plans are those who have taken the initiative to read the details and understand them completely. Equipping yourself with this knowledge allows you to fund your children's college education without stress, even if it's a funding goal situated many years in the future. Here, we'll explore a few unique attributes of 529 plans.
Generally speaking, anyone (grandparents, aunts and uncles, other relatives) can contribute to a 529 plan. Tax benefits vary by state -- some require that the tax benefits accrue to the account owner, and others allow the contributor to receive the deduction. There's no limit to the number of 529 accounts for a particular beneficiary, meaning tax benefits for 529 contributions can be widely accessed.
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Source Fool.com
