7 Questions to Answer Before Selecting Your 529 Plan

1. When choosing between a traditional 529 college savings plan and a prepaid 529 tuition plan, which is a better option?

a) Traditional college savings plan

b) Prepaid tuition plan

c) Both plans offer the same tax advantages

2. When selecting a 529 plan are you required to invest in your state’s plan?

a) Yes, you are only allowed to enroll in a 529 plan offered by your own state

b) No, you can enroll in any state's plan that best fits your needs

3. What is the maximum income the account owner can make in order to contribute to a 529 plan?

a) $30,000 + per year

b) $50,000 + per year

c) $100,000 + per year

d) There is no income limitation

4. Can 529 plan funds be used at any college or university in the country?

a) Only schools in major cities in the United States accept 529 plan funds

b) Any eligible educational institution in the U.S. or abroad will accept funds from your 529 plan

c) It is a case by case basis depending on the school, so best to check with the school administration before you apply

d) Only schools in your home state will accept 529 plan funds

5. Is there a minimum contribution to open a 529 plan?

a) It depends on the plan, but most minimum contributions are low, if there is one at all

b) Yes, every plan has a minimum contribution of $100

c) No, you don't have to put anything in your account to begin

6. Will starting a 529 account affect a student’s chances of receiving student aid?

a) Yes, but the effect is negligible

b) Yes, if you want to receive financial aid it is best to not save in a 529 plan

c) No affect whatsoever

7. Once I’ve decided what plan is best for me how do I set up my plan?

a) Visit the plan's website to see if you can enroll online

b) Visit collegesavings.org to find the phone number to reach the administers of your plan's program and give them a call to begin

c) Consult your financial adviser (if applicable)

d) All of the above

Thanks for testing your 529 plan knowledge. Have a look around collegesavings.org to learn more and find the best plan for your family.