Question: What is the best way to save for my kid’s college?
Advice from the Lab: Avoid paying taxes and earn money with investments by saving in a 529 plan.
A 529 savings account is a tax-free savings account designed specifically to incentivize saving for college. These accounts are similar to a ROTH IRA. The contributions are not tax-deductible, however, earnings from these accounts are not taxed and money is not taxed as income when it is taken out. The money contributed can be withdrawn to pay for college tuition, and more recently, private school. Rather confusingly, 529s are often issued by states, though you do not need to be a resident of the state offering them to use their 529 accounts. You also do not need to attend school in that state to use the 529. Some of the best plans are listed here.