Advantages of Investing for Retirement in a 529
529s have no contribution limits, thus you can stuff as much money into one (or multiple plans) as you want. … Consider using tax inefficient assets (such as REITs) or fully taxable bonds in your 529 retirement account, as called for depending on your asset allocation.
Keeping this in view, what happens to a 529 plan if your child doesn’t go to college?
The simple answer is: No, you won’t lose your money. The funds in a 529 plan can be used in a number of other ways if your beneficiary decides not to pursue higher education.
Many of the advantages that make a Roth IRA a great way to save for retirement make it an ideal way to save for college, too. Like the 529, there is no income tax deduction when you contribute to a Roth IRA. Instead, your contributions and earnings grow tax-free.
Herein, is a 529 plan worth it?
Benefits of a 529 plan
529 plans typically offer you unsurpassed tax breaks. Earnings in a 529 plan grow tax-free and are not taxed when they’re withdrawn. This means that however much your money grows in a 529, you’ll never have to pay taxes on it.
Should I open 529 for each child?
While it’s technically possible to use one 529 plan for multiple children, rather than making things simpler, it actually makes them more complicated. From beneficiary rules to investment strategies to ultimate fairness, having a separate 529 account for each child is the preferred way to go.
What happens if you have leftover money in 529?
You can fund education for other beneficiaries or withdraw the money entirely. Withdrawals from a 529 account for qualified higher education expenses are free from federal (and possibly state and/or local) income taxes.