529 Plan
If you’ve ever thought, “I really should start saving for college… but where do I even begin?” — you’re definitely not alone. That’s exactly where a 529 plan comes in. A 529 is a tax-advantaged savings plan designed specifically for education expenses such as college tuition, room and board, books, and even some K–12 costs. You can open one for a child, grandchild, niece, nephew — or even yourself — and allow the money to grow over time while life keeps moving.
One of the biggest reasons people like 529 plans is the tax benefit. Contributions grow tax-deferred, and when the funds are used for qualified education expenses, withdrawals are completely tax-free. Some states also offer a state tax deduction or credit for contributing (Tennessee does not). In simple terms, that means more of your money stays working for you instead of going to taxes. And you don’t need a large lump sum to get started — even small, consistent contributions can add up significantly over the years.
The best part is that it’s never too early — or too late — to start. While starting early gives your money more time to grow, starting later is still far better than not starting at all. A 529 plan offers flexibility, control, and peace of mind by helping you plan ahead for future education costs rather than reacting to them later. If college is even a maybe in your family’s future, setting up a 529 plan now is a simple step your future self will appreciate.
A few additional things to note:
- There is no annual contribution limit; instead, there is a lifetime maximum of $350,000 per beneficiary.
- You can also use up to $10,000 from a 529 plan to pay down student loans.