# 529 Plan

*Retirement & Benefits — Finicade finance glossary*

A 529 plan grows tax-free and pays out tax-free for qualified education costs, with many US states adding a deduction for contributions. It counts far more lightly than a custodial account in financial-aid formulas because it's treated as a parental asset. Beneficiaries can be changed to another family member, and unused balances can now be rolled into the beneficiary's Roth IRA within limits — which removes the old objection about overfunding.

**Also known as:** 529, college savings plan, education savings account

**Related terms:** [Custodial Account](https://finicade.com/glossary/custodial-account), [Tax-Advantaged Account](https://finicade.com/glossary/tax-advantaged-account), [Roth IRA](https://finicade.com/glossary/roth-ira), [Beneficiary](https://finicade.com/glossary/beneficiary), [Tax Deferral](https://finicade.com/glossary/tax-deferral)

Source: https://finicade.com/glossary/529-plan