What is the primary purpose of a 529 plan?

The primary purpose of a 529 plan is to save for future costs of higher education. This type of savings plan is specifically designed to help families set aside funds that can be used for qualified educational expenses, such as tuition, fees, books, and room and board. Contributions to a 529 plan often come with tax advantages, including tax-free growth and tax-free withdrawals when the funds are used for eligible education expenses.

This makes a 529 plan an effective financial tool for families aiming to manage the rising costs of college and other post-secondary education. It focuses on one goal: ensuring that beneficiaries have the necessary resources to pursue higher education without excessive financial burden.