Happy 5/29! Why it's a good day to set up a 529 college savings plan


The cost of college keeps going up – and so does the need for higher education.

May 29 – 5/29 (get it?) is known as 529 Day, proclaimed by the financial services industry to nudge families into taking the step to prepare for college expenses.

Forbes magazine calls it the third most popular May holiday, after Memorial Day and Cinco de Mayo.

If your eyes glaze over at the discussion of such things, Forbes offers a simple description of the plans, noting that "...a 529 is an investment savings vehicle that allows earnings to grow tax-free and ensures the money will not be taxed when used to pay for college."

The story includes a bit of financial advice that may stop parents from procrastinating, noting that delaying contributing to a 529 plan will cost you; it cites a general rule of thumb that says that every dollar borrowed will cost you $2 by the time you pay the debt, so money saved in advance can dramatically lower the lifelong cost of a college education. 

The Huffington Post reports that there are 5/29 efforts underway across the nation aimed at demonstrating how easy it is to set up an account, which can often be started with $25.

The Washington Post's personal finance columnist clears up some common misconceptions about the plans, noting that money invested in these college savings accounts can be used for qualified expenses at any public or private institution, regardless of where you set up the account or where the beneficiary attends school.

A total of 33 states sponsor plans, but families can invest in any state’s plan, regardless of where they or the beneficiary lives.

The Minnesota College Saving Plan is administered by the Minnesota Office of Higher Education. The website CollegeSavings.org compares the state plans.

The investment firm Edward Jones has surveyed Americans over the past four years to determine their awareness of 529 accounts. This year, it found that 66 percent of respondents do not know what a 529 plan is – a number that has not budged much over the life of the survey.

Money saved in a 529 plan has no impact on student aid eligibility. If your child decides not to attend college or vocational school, you can transfer unused funds to another family member, tax and penalty-free.

Next Up

Ian Cole

Wild trade Greg Pateryn to Avalanche for Ian Cole

Cole won a pair of Stanley Cups in Pittsburgh and is a former first-round pick.


St. Croix County GOP chair resigns after incendiary post on official website

John Kraft sparked controversy with his 'Prepare for War' post on the party website earlier this month.

ann kim

Ann Kim's new restaurant, Sooki & Mimi, to open in February

The James Beard Award winner is the brains behind Young Joni, Pizzeria Lola, and Hello Pizza.

Screen Shot 2021-01-19 at 1.32.19 PM

Firefighters rescue worker after trench fall in Rochester

The construction worker fell about 15 feet.

gray wolf

Grand Marais mayor's dog survives attack by wolves

He heard his 65-pound dog "screaming bloody murder" and then saw the wolves chasing her.

Screen Shot 2021-01-19 at 12.04.55 PM

Minnesota's COVID vaccine appointment site goes live

Huge demand was expected when the site went live at noon.

emily ford

Duluth woman is hiking 1,000-plus miles on the Ice Age Trail this winter

She could be the second person ever to finish a winter-thru hike of the Wisconsin trail.

coronavirus, covid-19, icu

Here is Minnesota's COVID-19 update for Tuesday, January 19

Two days in a row with fewer than 1,000 new cases.

Screen Shot 2021-01-19 at 10.52.12 AM

After fire destroyed their house, couple forced to euthanize beloved dog

The couple's daughter has launched a fundraiser for her parents.

Screen Shot 2021-01-19 at 10.16.14 AM

Investigation after teacher accused of lewd act during distance learning

No charges have been filed yet and the staff member has not been identified.