Anne Marie Etergino is not using 529 college savings plans to pay for her two children's college tuition. This may not sound like a big deal until you learn that she is a senior vice president at RBC Wealth Management in Chevy Chase, Md., and is more than aware of the tax benefits of using these plans. It gets more interesting when you learn that she is putting her kids through two of the most expensive colleges in the United States—Georgetown University and Wake Forest College. Instead, she saved for her kids' college by investing in non-tax-advantaged mutual funds.
If you believe all the marketing material put out by large 529 plan managers like UPromise, Etergino missed a golden financial opportunity, one of which every family in America with kids should take advantage. Why didn't she sign up to get tax-free growth on the undoubtedly very large sum of money needed to pay for these schools?