Education Saving Mythbusters

Common Misconceptions about 529 Plans

There are misconceptions about tax advantaged savings plans. Let’s explore the truth and dispel the myths once and for all. For each of the following statements, choose if it is a myth or fact.


#1: I can use any state’s 529 plan including the one live in.

FACT: As a U.S. resident, you can generally open and contribute to a 529 plan in any of the 50 U.S. states. This assumes a plan is sold nationally and not limited to state residents only.

#2: 529s can only be used for college in the plan's state.

MYTH: You can use a 529 for most colleges in the United States, no matter where your 529 savings plan is based.

#3: Only account owners are eligible to contribute to their 529 plan.

MYTH: Anyone can contribute to 529 plans! This includes parents, grandparents, aunts & uncles, friends and more. Gifting is easier than ever with Spryng™, visit franklinspryng.com for more details.

#4: My child cannot take the money from their 529 account when they turn 18.

FACT: You have control! The account owner owns the 529 plan’s assets and controls how and when they will be used. Unlike an UGMA/UTMA, the beneficiary does not control the plan’s assets, even when they turn 18.

#5: Only parents can be an account owner for 529 plans.

MYTH: Parents, grandparents, aunts, uncles, friends ... almost anyone can be an account owner with a valid U.S. Tax ID and a permanent address. You can even open a 529 plan for yourself!

Check out our Education Saving Myths flyer (PDF) today to get even more common education saving misconceptions!