529 college savings plans.

Bolster your college savings accounts with a state-sponsored 529 plan, with help from New York Life. Your college fund can grow tax-deferred and be distributed income tax free if used for eligible educational expenses.* Starting to plan your child’s educational future is as simple as starting a conversation with a local financial professional.

Any parent, relative, or family friend can invest in a 529 plan to finance a child's education. Savings in these vehicles have an opportunity to grow faster, because you defer paying taxes on any investment earnings. And if you use the 529 for eligible expenses, you don't pay any federal taxes on withdrawals.

Each state's plan has its own rules and requirements, but 529s are meant to fund any type of education expense: books, college fees and tuition, trade school fees and tuition, and private K–12 education. While some state plans offer a state tax benefit to state residents, you don't have to choose your own state's plan; you can choose any plan you like. At NYLIFE Securities LLC, we have access to 26 plans from 26 different states.

How a 529 plan works.

These plans invest your contributions in mutual funds-like investment choices available in the plan with your after-tax money. You have several investment options to choose from, and the account’s value will go up or down based on the performance of your investment choices. If used for qualifying expenses, you can take the money out tax free*.

529 College Fund FAQ’s

A 529 savings plan is a specialized savings account that is used to save money for education expenses. The money in a 529 plan may be used to pay for the college expenses and the K-12 tuition of the beneficiary, tax free. Many families find that 529 plans help them achieve their college savings goals.

529s are meant to fund any type of educational expense: books, college fees and tuition, trade school tuition, private K–12 education, off-campus housing, food and meal plans, computers, software, Internet services, any equipment that special-needs students may require, and some business purchases.¹

The beneficiary of the account can be changed, as long as the new beneficiary is a family member. The money in the account can also be rolled over into the account of a sibling. (Make sure all rollover rules are strictly followed if you go this route.) But if assets in a 529 are used for something other than qualified education expenses, you'll have to pay both federal income taxes and a 10 percent penalty tax on the earnings. If the beneficiary gets a full scholarship to college, the penalty for taking the cash will be waived.

529 plans offer a potential for greater return on investment, but there is also greater complexity and greater risk of loss (should the beneficiary decide not to attend college or should the investments in which the plan is invested not perform well). A significant benefit of 529 plans is their favorable tax treatment.

The return on investment in a 529 varies depending on the investment options you select. Account values grow tax-deferred ^**, possibly helping you accumulate more cash for when those tuition bills start rolling in.

There is no penalty for leaving leftover funds in a 529 plan after a student graduates or leaves college. However, the earnings portion of a nonqualified 529 plan distribution is subject to income taxes and a 10% penalty. Alternatively, the beneficiary of the account can be changed, as long as the new beneficiary is a sibling or other eligible family member.

Under federal law, contributions to a 529 plan cannot exceed the expected cost of the beneficiary's qualified higher education expenses. Limits vary by state, ranging from $235,000 to $529,000.²

Let's customize a strategy that works best for you.

Tell us about yourself and we'll connect you with a financial professional in your area.

First Name*

Last Name*

Email*

Phone Number*

Address (street, apt, bldg., etc.)*

City*

State*

Zip Code*

Date of Birth*

This helps us understand your immediate needs.

Join our email list to stay in the know about the best ways to prepare for your future.

adobeVisitorId

referrerUrl

scid

tid

* = required

How will I pay for college?

Father teaching daughter with son in foreground at home

Six ways to avoid being young and in debt.

A man talking on his cell phone looking at something on his laptop computer.

Is retirement taking a back seat to your children's college financing?

* Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.

**The earnings portion of the withdrawals will be subject to ordinary taxes plus a 10% penalty if they are used for non-eligible expenses.

Securities are offered by properly licensed registered representatives of NYLIFE Securities LLC (Member FINRA/SIPC), a Licensed Insurance Agency and a New York Life Company.

¹ Farran Powell and Emma Kerr, “Qualified Expenses You Can Pay For with a 529 Plan,” US News & World Report, November 11, 2019. USNews.com

² Kathryn Flynn, “How Much Can You Contribute to a 529 Plan in 2021?” Saving for College, February 25, 2021. SavingForCollege.com

OUR STORY OUR STORY

WORK WITH US WORK WITH US

OUR SOCIAL IMPACT OUR SOCIAL IMPACT

LIFE INSURANCE LIFE INSURANCE

SUPPLEMENTAL INSURANCE SUPPLEMENTAL INSURANCE

RETIREMENT INCOME RETIREMENT INCOME

INVESTMENTS INVESTMENTS

PREMIER SERVICES PREMIER SERVICES

ARTICLES & INSIGHTS ARTICLES & INSIGHTS

LEARN THE BASICS LEARN THE BASICS

PLANNING TOOLS PLANNING TOOLS

529 college savings plans.

How a 529 plan works.

529 College Fund FAQ’s

Let's customize a strategy that works best for you.

Related Articles

Accounts Accounts

New York Life New York Life

Expert Guidance Expert Guidance

WHO WE ARE WHO WE ARE

PREPARE FOR LIFE PREPARE FOR LIFE

WHAT WE OFFER WHAT WE OFFER

LEARN & COMPARE LEARN & COMPARE

FOR INSTITUTIONS FOR INSTITUTIONS

FOR DISTRIBUTORS FOR DISTRIBUTORS

INTERNATIONAL INTERNATIONAL

Log In

529 college savings plans.

How a 529 plan works.

529 College Fund FAQ’s

Let's customize a strategy that works best for you.

Related Articles

Accounts Accounts

New York Life New York Life

Expert Guidance Expert Guidance

Connect with us

Sign up for New York Life emails

Sign up for New York Life emails

WHO WE ARE WHO WE ARE

PREPARE FOR LIFE PREPARE FOR LIFE

WHAT WE OFFER WHAT WE OFFER

LEARN & COMPARE LEARN & COMPARE

FOR INSTITUTIONS FOR INSTITUTIONS

FOR DISTRIBUTORS FOR DISTRIBUTORS

INTERNATIONAL INTERNATIONAL