529 Plan


Q. I am a federal employee with 17 years until retirement. I was going to open a 529 college fund for my daughter, but I’m thinking that I should invest that money into my TSP instead … knowing that I’ll retire when my daughter graduates high school. If she gets a scholarship or decides not to go to college, however, the money can be spent elsewhere. Is this a good idea? 

A. You may use 529 Plan money for other purposes. If you assume that the rate of return earned in either account will be the same, then I think it’s better to contribute to the 529 Plan account. If you use the money for education, you’ll come out ahead. IF you use if for something else, you’ll come out even.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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