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What is a MOST 529 account?

A MOST 529 account allows you to control how your investments are spent, unlike a custodial account under the Uniform Gifts/Transfers to Minors Act (UGMA/UTMA), for instance, which lets your beneficiary use the money for any purpose once he or she reaches the age of majority.

Do 529 plans have a maximum?

Unlike IRAs or 401(k)s, there are no annual contribution limits for 529 plans. However, there are maximum aggregate limits, which vary by plan. Under federal law, contributions to a 529 plan cannot exceed the expected cost of the beneficiary’s qualified higher education expenses.

How much is needed to open a 529 account?

If all you can afford when you open your 529 plan is an initial contribution of $50 or $100, that’s fine; you can plan to build your account over time, contributing as much as you can afford. Many families start their 529 plan with small deposits at first, and every dollar added is less debt down the road.

What are the best college savings plans?

Best 529 Plans Of 2021

  • The Best Overall 529 Plans.
  • UNIQUE College Investing Plan (New Hampshire)
  • New York’s 529 College Savings Program – Direct Plan.
  • Bright Start Direct-Sold College Savings Program (Illinois)
  • U.Fund College Investing Plan (Massachusetts)
  • Ohio’s 529 Plan, CollegeAdvantage – Direct Plan.

Is a 529 plan tax free?

Tax advantages Even better, withdrawals are tax-free as long as you use the money to pay for qualified education expenses, which typically include tuition, books, school supplies and room and board. Contributions to a 529 are after-tax and not federally tax deductible.

Can grandparent transfer 529 to parent?

If you’d prefer to play it safe, grandparents can always transfer ownership of the 529 to the parent if allowed by their plan. A grandparent can transfer ownership of 529 funds to a parent 529 in the same state. Or grandparents can make contributions directly to the parent-owned 529 plan.

Can 529 money be used for food?

Money from a 529 account can be used for major post-secondary education costs such as: Required tuition, fees, books, supplies and equipment. Certain room and board expenses, which may include food purchased directly through the college or university (for the stipulations of off-campus living — see below)