What is a 529?
Save for education. Prepare for more possibilities.
A 529 plan is a tax-advantaged investment account designed to help families save for education. While 529 plans are often associated with college, they can now help pay for a much wider range of education and career expenses, from K–12 education to college, apprenticeships and eligible career credentials.
With NJBEST, you can invest over time while taking advantage of valuable federal tax benefits and additional benefits available to eligible New Jersey families.
Why Save With a 529?
Tax-Advantaged Growth
Your contributions have the opportunity to grow tax-deferred, so you won't pay federal income taxes on earnings while they remain in the account.
Tax-Free Qualified Withdrawals
Withdrawals are also free from federal income tax when used for qualified education expenses.
Flexibility for Different Paths
529 savings aren't limited to a traditional four-year college. Your savings can support a variety of education and career paths.
Who Can Open a 529 Plan?
A parent, grandparent, relative, friend or even the future student can open an account.
Generally, an account owner must:
- Be age 18 or older
- Have a Social Security number or taxpayer identification number
- Have a permanent U.S. address
There are no income limits to open or contribute to a 529 plan.
More Ways to Use Your 529
Your savings can help cover qualified expenses throughout a student's education journey.1
K–12 Education
Use up to $20,000 per year, per beneficiary for qualified K–12 education expenses, subject to federal requirements.1
College & Graduate School
Pay qualified expenses at eligible colleges, universities, vocational schools and other postsecondary institutions in the U.S. and certain schools abroad.
Qualified expenses may include:
- Tuition and required fees
- Books and supplies
- Computers and certain technology
- Room and board for students enrolled at least half-time
Apprenticeships
Use 529 savings for certain expenses associated with eligible registered apprenticeship programs.
Career & Professional Credentials
529 savings can help pay eligible expenses associated with qualifying postsecondary credentialing programs, expanding the ways your savings can support career preparation.
Student Loan Repayment
Up to $10,000 (lifetime limit) can be used to repay principal and interest on a student loan for the beneficiary or a sibling.
Roth IRA Transfers
Unused 529 assets may be eligible to transfer to a Roth IRA for the beneficiary, subject to a $35,000 lifetime limit and other federal requirements.
Start Building Their Future Today
Education can take many paths. A 529 gives you the flexibility to save for what's ahead, from school and college to career training and beyond.
Starting early can give your savings more time to grow, but it's never too late to begin.
To learn more, check out all of your investment options.
To open a 529 plan today, it’s never been easier than with NJBEST.
