In part because of the tax breaks they offer, 529 college savings plans have become a popular way to set money aside for one of the biggest bills most of us will ever face. The total assets in these state-sponsored accounts recently topped $234 billion, up from $90 billion a decade ago, according to the Investment Company Institute.
But popular doesn’t necessarily mean trouble-free. If you’re thinking of investing in a 529 plan for a child’s college education, it pays to know about these common missteps—and how to avoid them.
- Focusing only on taxes.
- Overpaying for advice.
- Not knowing what “qualifies.
- Taking too little risk—or too much.
- Rushing to cash out.
For more on each mistake continue reading.