The 529 Plan Guide: College Savings Done Right
Tax-free growth, state deductions, and the real cost of college.
The tax trifecta
Contributions grow tax-free, withdrawals for qualified education are tax-free, and 30+ states offer a tax deduction on contributions. That's a rare triple — no other account structure does all three.
What counts as qualified
Tuition, room and board, books, computers, and now up to $10,000/year for K-12 tuition. Since 2024, unused 529 funds can also roll into a Roth IRA (up to $35,000 lifetime, after 15 years).
The state deduction fine print
Most states deduct contributions to THEIR plan — check before investing out of state. A few states (CA, NJ) offer no deduction at all, so any state's plan works there.
Your savings plan
Your Results
Average 4-year public college cost is roughly $110k-$130k today (tuition, room, board). Private schools run higher.
Frequently Asked Questions
Is a 529 worth it?
Earnings grow tax-free and withdrawals for qualified education expenses are tax-free — plus many states offer a tax deduction on contributions. It's the best college savings vehicle for most families.
What return should I assume?
Age-based 529 portfolios blend stocks and bonds. Expect 5-7% for long horizons, less as the child nears college.
Does my state give a 529 tax deduction?
Most states offer a state income tax deduction or credit for 529 contributions — 30+ states do, with limits usually between $5k-$20k per year per beneficiary. A few (like California and New Jersey) don't, but you can still use any state's plan.