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Roth IRA vs. 529 Plan for Education Savings

Which account is the better place for you to stash college savings?

By Kailey Hagen – Updated Nov 5, 2024 at 5:02PM

Key Points

  • 529 plans are state-administered and can be used for various educational expenses, including up to $10,000 of K-12 expenses per year.
  • Roth IRAs offer flexibility, allowing withdrawals for any reason, but you may only contribute up to $7,000 in 2024 or 2025 ($8,000 if you're 50+).
  • Both plans affect financial aid calculations differently when applying through FAFSA.
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