529 Plans: Should You Use Them For K-12 Education?
February 9, 2021 2:00 AM Reyna Gobel - Forbes Advisor
Posted:
Updated:
February 10, 2021 4:26 AM
In 2019, changes to federal law made it possible for 529 plans, tax-advantaged education investment accounts, to be used for up to $10,000 each in student loan repayment and K-12 education, in addition to college costs.
Cash-strapped parents may feel pressure to save for both college and private K-12 expenses. Here’s what to know about whether saving for both is the right choice for you.
What Is a 529 Plan?
A 529 plan is an education investment account generally authorized by one of 50 states.
529 plans come in two forms. One form has investment options, similar to a 401(k), that you can spend on K-12 tuition or the higher education institution of the student’s choice. The other is prepaid tuition plans where you can prepay college tuition for future years at today’s prices.