Among other things, this event presents many parents (and even grandparents) of young children with an important decision: save in a Roth IRA or 529 plan? On the face of it, the Roth IRA and a 529 plan share many similarities. Before you get there, here are some frequently asked questions that explain some of the differences between the Roth IRA and a 529 plan. This is an important consideration when comparing 529 plan options as some states may force the 529 plan into investments that may be too conservative given the objectives of the 529 plan owner. Unlike money from a Roth IRA, though, using 529 plan funds won’t count as income for determining financial aid.

Source: Forbes April 11, 2019 16:52 UTC