Hardly anyone will know what this is because most Americans don’t understand what a 529 college savings plans is. A new survey by the brokerage firm Edward Jones has concluded that 62% of Americans aren’t familiar with the plans.
As a financial journalist this lack of knowledge surprised me. One of the bread-and-butter issues that personal finance journalists have been writing about for years is the 529 plan.
A 529 plan is a great way to save for a child’s college education. That was a primary way that I stashed money away to pay for college for my son and daughter, who earned her bachelor’s degree last year. Sometime during the next 12 months, I will be draining the last dollars in the 529 account for my son, who is now a college junior.
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According to the Edward Jones survey, the number of people who understand what a 529 plan is rises with a family’s income. Only 27% of those surveyed who make less than $35,000 a year knew was a 529 plan was versus 57% for those making between $75,000 and $100,000. And 62% of respondents earning more than $100,000 a year were familiar with 529s.