Finding the right college savings vehicle can be daunting
There are many choices, and it can be difficult to discern the differences between each type of account. Learn about the most common college-savings vehicles, including the tax treatment for each, how much you can contribute, who can contribute, and the rules governing distributions:
- 529 College-Savings Plan – Best for individuals who are aiming to stash a significant sum for college while also enjoying tax benefits.
- Coverdell Education Savings Account – Best for individuals aiming to invest relatively smaller sums for education–including elementary, high school, and college–who are seeking more investment flexibility than 529s afford.
- UGMA/UTMA – Best for individuals who may not attend college.
- Roth IRA – Best for savers aiming to invest relatively smaller sums and who desire more flexibility in terms of investment options and use of assets (can be used to pay for college and to fund retirement).
Read more about your options to save for college