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What's a 529 college savings plan? What parents need to know

These savings plans are designed specifically to help pay for college and are a great investment option for families who want to see their money grow, tax-free, over a stretch of time.

What's a 529 college savings plan? What parents need to know

As you dream of your child's future, you might have this question looming over your head: How am I going to pay for my child's college education? As parents, we know that the earlier you start a college fund for your kids, the better.

If you're not sure what other ways you can financially prepare for the coming college years, a good place to start is a 529 college savings plan. These savings plans are designed specifically to help pay for college and are a great investment option for families who want to see their money grow, tax-free, over a stretch of time.

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Here are answers to common questions around 529 plans so you can be fully equipped to start saving for your little one's bright future:

What is a 529 savings plan?

A 529 is a state-sponsored college savings plan that allows parents to invest money towards educational expenses. The 529 is beneficial for many reasons, but most importantly, the savings plan is tax-free. Once the beneficiary of the account is college-bound, they're able to withdraw funds free of federal and state income taxes.

By the time college rolls around, the recipient can use the money towards a variety of schooling necessities, such as:

  • Tuition
  • Books
  • Laptops and related technology devices
  • Room and board

Additionally, as of January 1, 2018, families can now also use their 529 plans to pay for private elementary, middle and high school tuition.

What kind of 529 plan should I get?

There are two types of 529 plans:

  • College savings plans: This is the more popular of the two 529 plans. The plan works by establishing a savings account specific to schooling expenses. Contributions are invested, tax-free until the beneficiary is ready for college.
  • Prepaid tuition plans: The prepaid tuition plan allows parents to pre-purchase all or part of tuition costs for an in-state, public school. The investment can then transfer to one of the 250 private or out-of-state colleges sponsored by the plan. This plan is great for locking in current tuition rates, but make sure to consider all the terms, as some schools come with high premiums and are not always guaranteed to be covered.

How do I contribute money to my child's 529 plan?

There are two approaches to contributing to a 529 account:

  • Static funds: Static funds include stocks, bonds, real estate funds or money market accounts. This is a customized plan that tends to be more appealing to investment-savvy folks.
  • Dynamic investment: Dynamic investments are based on the beneficiary's age, which starts off by investing in stocks and higher-risk options. As the child ages, the investment automatically shifts to a steadier, low-risk option. This approach is better for those who prefer a hands-off approach towards investing.

Where should I open my 529 college savings plan?

Although every state offers at least one 529 plan, their investment options and fees look a little different.

You can invest in any state's 529 plan, even if you don't live there or your child won't go to school there. With that said, some states offer tax deductions based off of 529 contributions, so it's worth shopping around to see what plan works best for your current situation.

Starting a 529 college savings plan requires some time and research and before you dive in, it's important to know where you stand. With tools like Intuit's Turbo, you can gain a holistic view of your financial profile and see your income, credit and loan details in a single account dashboard.

Will this impact my child's ability to file for financial aid?

Financial aid takes family income and additional assets into account, but when a student applies for Federal Student Aid, there's a section of the application dedicated to Expected Family Contribution, where the student will note family income and assets, such as the 529 plan.

Fortunately, a 529 is weighed far less than other areas of wealth, which means that it will not greatly impact a student's eligibility for financial aid nearly as much as if the child comes from a wealthy family.

When it's time for college, how does my child access their 529?

Assuming that the 529 plan was open in the parent's name, you would allocate the funds in its totality or on an as-needed basis, on behalf of the recipient. Parents can also transfer the account into the beneficiary's name, when their child is prepared to take on that responsibility. This is also a great time for parents to have the real money talk with their child as they head off to school, so they understand what these funds are used for.

Is my 529 plan tax deductible?

When it's tax time and you're getting ready to file all you'll have to do is answer a few simple questions about your education tax benefits associated with your 529, and you'll be eligible for relevant deductions. If you run into any jams during this process, you can connect with a tax pro or CPA to answer your questions.

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14 Toys that will keep your kids entertained inside *and* outside

They transition seamlessly for indoor play.

With Labor day weekend in the rearview and back-to-school in full swing, most parents are fresh out of boxes to check on their "Fun Concierge" hit list. It's also the point of diminishing returns on investing in summer-only toys. So with that in mind, we've rounded up some of our favorite toys that are not only built to last but will easily make the transition from outdoor to indoor play. Even better, they're Montessori-friendly and largely open-ended so your kids can get a ton of use out of them.

From sunny backyard afternoons to rainy mornings stuck inside, these toys are sure to keep little ones engaged and entertained.

Meadow ring toss game

Plan Toys meadow ring toss game

Besides offering a fantastic opportunity to hone focus, coordination, determination and taking turns, lawn games are just plain fun. Set them up close together for the littles and spread them out when Mom and Dad get in on the action. With their low profile and rope rings, they're great for indoors as well.

$30

Balance board

Plan Toys balance board

Balance boards are a fabulous way to get the wiggles out. This one comes with a rope attachment, making it suitable for even the youngest wigglers. From practicing their balance and building core strength to working on skills that translate to skateboarding and snowboarding, it's a year-round physical activity that's easy to bring inside and use between Zoom classes, too!

$75

Detective set

Plan Toys detective setDetective Set

This set has everything your little detective needs to solve whatever mystery they might encounter: an eye glasses, walkie-talkie, camera, a red lens, a periscope and a bag. Neighborhood watch? Watch out.

$40

Wooden doll stroller

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Take their charges on a stroll around the block with this classic doll stroller. With the same versatility they're used to in their own ride, this heirloom quality carriage allows their doll or stuffy to face them or face the world.

$120

Sand play set

Plan Toys sand set

Whether you're hitting the beach or the backyard sandbox, this adorable wooden sand set is ready for action. Each scoop has an embossed pattern that's perfect for sand stamping. They're also totally suitable for water play in the wild or the bathtub.

$30

Water play set

Plan Toys water play set

Filled with sand or water, this tabletop sized activity set keeps little ones busy, quiet and happy. (A mama's ideal trifecta 😉). It's big enough to satisfy their play needs but not so big it's going to flood your floors if you bring the fun inside on a rainy day.

$100

Mini golf set

Plan Toys mini golf set

Fore! This mini golf set is lawn and living room ready. Set up a backyard competition or incorporate into homeschooling brain breaks that shift focus and build concentration.

$40

Vintage scooter balance bike

Janod retro scooter balance bike

Pedals are so 2010. Balance bikes are the way to go for learning to ride a bike while skipping the training wheels stage altogether. This impossibly cool retro scooter-style is built to cruise the neighborhood or open indoor space as they're learning.

$121

Wooden rocking pegasus

plan toys wooden rocking pegasus

Your little will be ready to take flight on this fun pegasus. It gently rocks back and forth, but doesn't skimp on safety—its winged saddle, footrests and backrest ensure kids won't fall off whether they're rocking inside or outside.

$100

Croquet set

Plan Toys croquet set

The cutest croquet set we've ever seen! With adorable animal face wooden balls and a canvas bag for easy clean up, it's also crafted to stick around awhile. Round after round, it's great for teaching kiddos math and problem-solving skills as well.

$45

Wooden digital camera

fathers factory wooden digital camera

Kids get the chance to assemble the camera on their own then can adventure anywhere to capture the best moments. With two detachable magnetic lenses, four built-in filters and video recorder, your little photographer can tap into their creativity from summertime to the holidays.

$179

Wooden bulldozer toy

plan toys wooden bulldozer toy

Whether they're digging up sand in the backyad or picking up toys inside, kids can get as creative as they want picking up and moving things around. Even better? Its wooden structure means it's not an eye sore to look at wherever your digger drops it.

$100

Pull-along hippo

janod toys pull along hippo toy

There's just something so fun about a classic pull-along toy and we love that they seamlessly transition between indoor and outdoor play. Crafted from solid cherry and beechwood, it's tough enough to endure outdoor spaces your toddler takes it on.

$33

Baby forest fox ride-on

janod toys baby fox ride on

Toddlers will love zooming around on this fox ride-on, and it's a great transition toy into traditional balance bikes. If you take it for a driveway adventure, simply use a damp cloth to wipe down the wheels before bringing back inside.

$88

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I never wanted to be a mom. It wasn't something I ever thought would happen until I fell madly in love with my husband—who knew very well he wanted children. While he was a natural at entertaining our nephews or our friends' kids, I would awkwardly try to interact with them, not really knowing what to say or do.

Our first pregnancy was a surprise, a much-wanted one but also a unicorn, "first try" kind of pregnancy. As my belly grew bigger, so did my insecurities. How do you even mom when you never saw motherhood in your future? I focused all my uncertainties on coming up with a plan for the delivery of my baby—which proved to be a terrible idea when my dreamed-of unmedicated vaginal birth turned into an emergency C-section. I couldn't even start motherhood the way I wanted, I thought. And that feeling happened again when I couldn't breastfeed and instead had to pump and bottle-feed. And once more, when all the stress from things not going my way turned into debilitating postpartum anxiety that left me not really enjoying my brand new baby.

As my baby grew, slowly so did my confidence that I could do this. When he would tumble to the ground while learning how to walk and only my hugs could calm him, I felt invincible. But on the nights he wouldn't sleep—whether because he was going through a regression, a leap, a teeth eruption or just a full moon—I would break down in tears to my husband telling him that he was a better parent than me.

Then I found out I was pregnant again, and that this time it was twins. I panicked. I really cannot do two babies at the same time. I kept repeating that to myself (and to my poor husband) at every single appointment we had because I was just terrified. He, of course, thought I could absolutely do it, and he got me through a very hard pregnancy.

When the twins were born at full term and just as big as singleton babies, I still felt inadequate, despite the monumental effort I had made to grow these healthy babies and go through a repeat C-section to make sure they were both okay. I still felt my skin crawl when they cried and thought, What if I can't calm them down? I still turned to my husband for diaper changes because I wasn't a good enough mom for twins.

My husband reminded me (and still does) that I am exactly what my babies need. That I am enough. A phrase that has now become my mantra, both in motherhood and beyond, because as my husband likes to say, I'm the queen of selling myself short on everything.

So when my babies start crying, I tell myself that I am enough to calm them down.

When my toddler has a tantrum, I remind myself that I am enough to get through to him.

When I go out with the three kids by myself and start sweating about everything that could go wrong (poop explosions times three), I remind myself that I am enough to handle it all, even with a little humor.


And then one day I found this bracelet. Initially, I thought how cheesy it'd be to wear a reminder like this on my wrist, but I bought it anyway because something about it was calling my name. I'm so glad I did because since day one I haven't stopped wearing it.

Every time I look down, there it is, shining back at me. I am enough.

I Am Enough bracelet 

SONTAKEY  I Am Enough Bracelet

May this Oath Bracelet be your reminder that you are perfect just the way you are. That you are enough for your children, you are enough for your friends & family, you are enough for everything that you do. You are enough, mama <3

$35

We independently select and share the products we love—and may receive a commission if you choose to buy. You've got this.

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