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529 for younger sibling (programming.dev)

submitted 3 months ago by JumpingPants@programming.dev to c/personalfinance@lemmy.ml

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Hi, there. I want to start saving money for my younger sibling so they can go to college easier.

I have financial aid and managed to get a scholarship to pay for a good amount.

I don't spend a lot of money. So I can put some aside every month for the next 5 years. Wouldn't the rates be pretty good to put money into?

Any reasons why I shouldn't be trying this? Should I save for myself or something? The potential earnings seem like a better idea.

https://www.fidelity.com/529-plans/overview

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[–] CircuitGuy@lemmy.world 1 points 1 month ago

The main benefit of a 529 is its gains are sheltered from taxes. If you're in high school or college, you probably don't pay a high tax rate, if any. I like a 529, but I wonder if it would be simpler for you to save in a regular bank account. There's nothing wrong with the 529, though, if it's not too complicated to set up.