Saving over time, a little can go a long way
This chart is a hypothetical example and should not be considered an indication of performance of a 529 plan. These estimates assume that contributions of $50, $150, and $250 are made at the beginning of the month with a 4.5% annual return. Assumes that the money is invested in a tax-free investment vehicle, such as a 529 plan. Amounts are rounded to the nearest $50.
Myth: Saving in a 529 college savings plan will reduce available financial aid. Truth: Only up to 5.6% of a parent-owned 529 college saving plan factors in to financial aid programs.

Are your child's college savings on track? We've come up with a simple rule of thumb to see how you're doing. Our rule of thumb is based on how Americans typically pay for college. We call it the "college savings 2K rule of thumb." The average American should aim to save 2,000 times (2K) their child's age. For example, if your child is 5 years old, you should have $10,000 put away for college.


Of course, you may not be the average American! Another way to check your progress is to use our new College Savings Calculator. After answering 5 simple questions, you'll see how much you should consider saving each month to meet your college savings goal.


Once you have a rough idea of how much, and you've made sure you're on track with other financial goals like saving for retirement, you can focus on the how to save.


While there are different types of plans available for college savings, a 529 college savings plan is a tax-advantaged account that offers fewer restrictions than other plans (no income or age limits; you can invest in any state's plan) and you can set up regular, automatic contributions. While parents are often the account holders, other family members or family friends can also open a 529 (some plans offer gifting options too).

 

Map of the U.S.

You can invest in a 529 plan from any state and use that money at colleges across the country. Be sure to research your own state's plan for potential benefits, including in-state tax benefits.

Here are some of the other perks of a 529 to keep in mind:

Tax benefits

Money invested in the account grows tax-deferred and qualified higher education expenses are federal income tax-free.

Cover more than tuition

You can also use 529 funds to pay for room and board, books, and computers.*

Flexibility

529 funds can be used for qualified higher ed expenses at any eligible institution and may be transferred to any eligible family member of the original beneficiary.

Take the next step: Start a college savings plan

From the moment your child is born, you begin imagining their future. Get a jumpstart on funding their education.


Learn more about Fidelity-managed 529 college savings plans, or speak with your advisor.

Take the next step: Start a college savings plan

From the moment your child is born, you begin imagining their future. Get a jumpstart on funding their education.


Learn more about Fidelity-managed 529 college savings plans, or speak with your advisor.

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