529 Plan Infographic

Posted on by

How a 529 Plan Works & How You Can Build a College Fund with Just $100 a Month in a 529 Plan

This infographic is a great visual explainer about saving for college, and how 529 plans work. They are an easy-to-use, powerful way to save money and grow those savings year over year.

Scroll down below the college savings infographic to read more.

529 Plan – 6 Quick Facts

1. A 529 Plan is a flexible savings plan to save for college and related education expenses.

2. Money grows much faster in a college savings 529 plan vs a savings account at the bank. The average bank savings account sees annual interest growth of 0.05%. 529 plans, on average, see an annual return of over 6%. That’s over 100x more interest.

3. 529 plans have tax benefits. You’ll pay no taxes on 529 plan funds you withdraw as long as they go towards qualifying education costs. Additionally in many states, like Illinois or Utah, you can claim tax credits or tax deductions for your 529 plan contributions.

4. Each state sponsors 1 or more 529 college savings plan to help families pay for education. Washington D.C., Puerto Rico, and many U.S. overseas territories also offer 529 plans as well. You can enroll in one of your state’s plan, or in any plan from any state that will accept out of state enrollments.

5. Use 529 plan funds for more than just college. This can include K-12 private school tuition, tutors, study abroad programs, online courses, trade school tuition, books, school supplies, academic fees, and even student loan debt.

6. If you put $100 a month aside every month for the next 18 years… In 18 years, you’d have $21,703 in a savings account OR $40,351 in a 529 savings plan account. You’d come out ahead by $18,648 by putting your money in a 529 plan instead of a bank savings account.

For many 529 plans, you can enroll online in a 529 plan in just a few minutes. Or speak with your trusted financial advisor on how to get started.

Any 529 plan account can be linked to the free Upromise Rewards program. Upromise has helped families save over $1 Billion for college. Join Upromise for free and earn cash rebates and other free cash rewards to save for college. Additionally, every month 5 Upromise members win a $529 scholarship for their family’s futures scholar.

Related Articles:

All State 529 Plans by State