529 Plans (Qualified Tuition Programs)

What this video covers

• How 529 savings plans function like tax-advantaged brokerage accounts with mutual fund-like portfolios, and why they carry full market risk with zero guarantees
• The $20,000 annual cap on qualified kindergarten through 12th grade (K-12) withdrawals from a 529 savings plan, and why higher education expenses have no annual cap
• The $10,000 lifetime cap per borrower for student loan repayment from a 529 plan, and how this differs from the K-12 annual limit
• How 529 prepaid tuition plans let families lock in current tuition rates, and why they are guaranteed solely by the sponsoring state (not the Federal Deposit Insurance Corporation or Securities Investor Protection Corporation)
• The strict coverage limitations of prepaid plans: tuition and mandatory fees only, with no room, board, books, or equipment covered
• Why prepaid plans restrict beneficiaries primarily to in-state public institutions, while savings plans work at any eligible institution nationwide
• How age-based portfolios automatically shift to more conservative allocations as a beneficiary approaches college age