College not a necessity to take advantage of 529 savings plans

Congress likely to expand how you can use the funds from specialized savings

InvestigateTV - A 529 plan is a tax-advantaged investment plan that allows you to save money for future education costs. If the account beneficiary does not go to college, there are still options for using the funds without tax penalties.

Robert Farrington, the founder of The College Investor, said a 529 plan has uses in addition to college.

“You could use a 529 plan to pay for K-12 private education. You can use it for trade school, vocational schools,” Farrington explained. “You can actually even use a little bit of it for student loan repayment in the future.”

Farrington said Congress keeps expanding how you can use the money, and he predicts there will be even more options in the future.

Farrington advised parents to set up a plan even if their child might not go to college. You could always change the beneficiary to another child or even a future grandchild.

Investor.gov has an introduction to 529 plans and other free resources on their site.

Rachel DePompa

Rachel DePompa

Rachel DePompa is NBC12's On Your Side Investigator. Before joining WWBT in March of 2008 Rachel worked in Roanoke, Bristol and Harrisonburg.