Why 97% of People Don't Use 529 College Savings Plans
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Saving for a kid's college can feel like trying to scale a skyscraper. Unfortunately, the tool most recommended to parents for the challenge is often little better than a step stool -- one known to wobble.
The appeal of 529 college savings plans is that investment returns aren't taxed as long as the money's used for education. States set the investment options, and often add on additional tax incentives. Despite these perks, less than 3 percent of American families use the plans. Those who do use them are disproportionately wealthy, with 25 times more assets than those who don’t use the plans, according to the Government Accountability Office (GAO).