A 529 plan is a tax advantaged investment plan designed to encourage parents, grandparents, and students to save for future college expenses. 529 plans, legally known as “qualified tuition plans”, are named after section 529 of the Internal Revenue Code and are administered by state agencies and organizations.
Most financial advisors agree that a 529 plan is the smartest method to save for college expenses. They have very high maximum contribution limits, they carry many tax advantages, there are no limits to how many accounts a family can have, and they can be used for a wide variety of qualified college expenses including tuition, room and board, books, computers, etc.