Answer:
A 529 plan is a tax-advantaged investment vehicle in the US for saving for a beneficiary's qualified education expenses, such as tuition, fees, books, and other supplies. Here are some true facts about a 529 plan:
Tax-advantaged: Contributions to a 529 plan grow tax-free and can be withdrawn tax-free as long as they are used for qualified education expenses.
Investment vehicle: A 529 plan is not a savings account, but an investment account. The money invested in a 529 plan is invested in a portfolio of stocks, bonds, or other assets and its value may fluctuate based on market performance.
Beneficiary-focused: A 529 plan is established for a designated beneficiary, who can be any person, including the account owner's child, grandchild, spouse, or even themselves.
No income restrictions: Anyone can contribute to a 529 plan regardless of their income level.
State-sponsored: 529 plans are sponsored by individual states, and most states offer their own plans with unique features and investment options.
Transferable: The beneficiary of a 529 plan can be changed to another eligible family member without penalty.