A 529 plan is a savings account that can help cover qualifying education expenses. These plans have many advantages, such as portability and favorable tax treatment. A 529 plan allows family members such as parents and grandparents to help contribute to a child’s education.
The average annual in-state tuition cost at a four-year college is $9,678, according to the Education Data Initiative, while out-of-state tuition averages $27,091. Additional costs for things such as books, supplies and food average about $16,000-17,000 per year. With college costs high and only increasing, a 529 plan is more essential than ever.
Here’s how grandparents can use a 529 plan to help grandchildren with education expenses.
