529 COLLEGE SAVINGS PLAN
Maximum contribution:
Annual: Typically, none. But if you contribute more than $14,000 in any given year, you'll trigger gift taxes.
Lifetime: As much as $300,000 in many plans.
Tax treatment:
Federal: Tax-deferred growth, tax-free withdrawals for college expenses.
State: Many states provide tax benefits to residents using their plan.
Financial aid impact: Maximum of 5.64% of value will count against you.
Restrictions on withdrawal and spending: Withdrawals must cover qualified higher education expenses.
Potential problems: Limited investment options. Some states funds have comparatively high expense ratios.
529 PREPAID TUITION PLAN
Maximum contribution:
Annual: Typically, none. But if you contribute more than $14,000 in any given year, you'll trigger gift taxes.
Lifetime: Up to $220,000 in some plans.
Tax treatment:
Federal: Tax-deferred growth, tax-free withdrawals for tuition.
State: Many states provide tax benefits to residents using their plan.
Financial aid impact: Maximum of 5.64% of value will count against you.
Restrictions on withdrawal and spending: Withdrawals only cover tuition.
Potential problems: Some plans are facing financial difficulties and may not have the funds to meet their obligations.
Most prepaid tuition plans require either owner or beneficiary of plan to be a state resident.
PERMANENT LIFE INSURANCE
Maximum contribution: None.
Tax treatment:
Federal: Tax-free access to the cash value of your policy.
Financial aid impact: These assets are not counted against you in financial aid.
Restrictions on withdrawal and spending: None.
Potential problems: High fees; lose money if withdrawals are made within the first few years.
ROTH IRA
Maximum contribution:
Annual: $5,500.
Lifetime: Depends on income.
Tax treatment:
Federal: Tax-deferred growth, and tax-free withdrawal of contributions if used for college. Earnings can be withdrawn tax-free after you turn 59 1/2.
Financial aid impact: These assets are not counted against you in financial aid.
Restrictions on withdrawal and spending: None (10% early withdrawal penalty waived for qualified higher education expenses).
Potential problems: Earnings are subject to income tax and withdrawals can impact future financial aid eligibility.
NEXT: What's the best 529 savings plan for you 
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| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.98% | 3.90% | |
| 15 yr fixed | 3.15% | 3.03% | |
| 5/1 ARM | 2.76% | 2.72% | |
| 30 yr refi | 3.96% | 3.89% | |
| 15 yr refi | 3.12% | 3.03% |
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