Let’s bust the myths about 529s.

Myth: MOST 529 savings can only be used for schools in Missouri.

Truth: You can use the assets in your MOST 529 account at any eligible 2- and 4-year college, graduate school (including law and medical), vocational/technical school, apprentice program, and K-12 institution.¹

Myth: You can only use a 529 account to pay higher education tuition.

Truth: You can use your MOST 529 account assets for many qualified higher education expenses, including tuition, fees, computers, and certain room and board costs. You can also use it to pay for K-12 tuition limited to up to $10,000 per student per year across all 529 plan accounts for such student.²

Myth: It costs a lot to open a 529 account.

Truth: Open a MOST 529 account with no minimum contribution, or as little as $1 a month with recurring contributions.³ You can also set up payroll direct deposit through your employer with just $1 per pay period.³It’s no wonder that 529s have become so popular with savers at all income levels.

Myth: You have to know a lot about investing with a 529 account.

Truth: With a MOST 529 account, you can be as hands-on or hands-off as you want. Choose an Age-Based Portfolio that automatically adjusts its investments as your child nears enrollment. Are you more DIY? MOST 529 has 16 Individual Portfolios; choose one, or pick up to five portfolios and mix and manage your own deductions.

Myth: My child is too old for me to open a 529 account.

Truth: There are no age requirements for a 529 plan beneficiary. It’s true that younger kids will have more time for their investments to grow in a 529 plan, but parents of older students can take advantage of MOST 529’s tax-deferred growth and significant tax deduction.

Myth: If my child doesn’t go to college or gets a “full ride,” I lose the money.

Truth: That just won’t happen! If your child gets a scholarship or decides to take a different path, you have a lot of options:

Transfer the money to a sibling to use for their post-secondary education.
Use it yourself for continuing education or career retraining.
Use it to pay off a student loan, up to $10,000.⁴
Withdraw the money and pay tax and a 10% penalty on just the EARNINGS portion of your savings; your principal (what you contributed) will never be taxed or penalized.

The 10% penalty may not even apply if the beneficiary:

Decides to attend a U.S. Military Academy.
Receives a scholarship; for withdrawals up to the scholarship amount, the 10% penalty is waived
Becomes disabled, or passes away.

Myth: My child won’t get financial aid if we have a 529 account.

Truth: 529s have real advantages over other savings vehicles. Withdrawals from Roth IRAs, for example, will be counted as student income and are assessed at up to 50%, so a $10,000 withdrawal can reduce a student’s aid eligibility by $5,000. Conversely, a student-owned 529 is considered a parental asset, and may only reduce your financial aid eligibility by 5.64% of the 529 account’s value.

¹ An eligible institution is one that can participate in federal financial aid programs.

² Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.

³ A plan of regular investment cannot assure a profit or protect against a loss in a declining market.

⁴Principal or interest on any qualified education loan (as defined in section 221(d) of the Internal Revenue Code) of the designated beneficiary or a sibling of the designated beneficiary, up to a lifetime limit of $10,000 per individual. Note, if you make an education loan repayment from your Account, Section 221(e) (1) of the Internal Revenue Code provides that you may not also take a federal income tax deduction for any interest included in that education loan repayment.