This is how much parents need to save to cover college bills in 2036

Personal Finance

Your first step in deciding on a 529 plan should be to learn if your state offers a full or partial state income tax deduction for your contribution, said Kim Lankford, contributing editor at Kiplinger’s Personal Finance, who writes about the plans.

More than half of states, plus the District of Columbia, offer such a deduction, she said — and that perk often (but not always) makes it smart to stick with your home state’s plan.

(Seven states allow you to claim a tax benefit even if you don’t contribute to your own state’s plan, according to Arizona, Arkansas, Kansas, Minnesota, Missouri, Montana and Pennsylvania.)

Beyond taxes, you can compare plans by their investment options and fees. “Look at what funds they’re invested in and if there are some you’re familiar with and like already,” Lankford said.

Many funds offer age-based plans, meaning the investments become less aggressive as your child’s first day at college nears. As time goes on, keep tabs on your account to make sure it’s being managed in a way you’re comfortable with.

You can get a breakdown of 529 plans at

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