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MoneyTips

Congratulations! You have saved for your child's education using a state 529 plan and built up a decent nest egg to send him or her off to school or college with minimal financial worries. Once a choice of school is made, you can apply the 529 funds toward the educational costs — but beware of these mistakes that parents make when first withdrawing from 529 plans.

Assuming the Process is Automatic – People are so used to the automated aspects of financial services that they expect 529 accounts to work in the same way. In the case of a 529 plan, you must request that the funds be withdrawn and direct them accordingly. Check with your 529 plan to verify the options. Typically, you can direct the funds to the school, beneficiary (student), or to the owner (parents). In all cases, you must initiate the withdrawal.

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