Un plan de ahorro educativo es una cuenta de inversión que proporciona beneficios fiscales cuando se utiliza para pagar los gastos educativos calificados de un beneficiario designado. Los planes de ahorro educativo generalmente se categorizan como planes de ahorro universitarios 529 o planes de matrícula prepagada.

529 College Savings Plans

A 529 college savings plan works like a Roth IRA or Roth 401(k). You invest your after-tax contributions in mutual funds, ETFs and other similar investments. A 529 plan offers many investment options, and its value will go up or down based on the performance of the investment options. Your investment grows tax-deferred, and it can be withdrawn tax-free when the money is used to pay for qualified expenses, including:

• College tuition, housing and more,
• K-12 tuition,
• Apprenticeship programs, and
• Student loan repayments.

How to Find the Best 529 Plans

Despite the potential advantages of 529 plans, only one-third of college-saving parents use them, according to a Sallie Mae report “How America Saves for College.” If you think investing in a 529 plan is right for you, be sure to consider these factors:

• Rate of return – Review the financial performance of 529 plans over an extended time period. 
• Annual fees – Some fees are inevitable, including management and state fees, but the more they add up, the faster they’ll reduce your investment earnings.
• Tax breaks – Some states offer tax breaks for selecting a local plan.

Prepaid Tuition Plans

As the name implies, prepaid tuition plans let you pre-pay all or part of the costs of an in-state public college education at today's tuition rates. Some plans can be converted for use at private or out-of-state colleges, and most states guarantee that the funds you put into a prepaid plan will keep pace with tuition.

For more information on finding the best 529 plans – whether you’re considering a college savings plan or a prepaid tuition plan – visit savingforcollege.com.