From a tax perspective, 529 plans offer the opportunity for tax-free growth on investment earnings if distributions from the plan are used for qualifying college expenses (tuition, fees, books and computers).
Yet Roth savings can be very powerful as the earnings and eventual distributions are tax-free, leaving retirees with a tax-free bucket to draw on when managing their retirement income and retirement tax bracket.
While the yield looks very attractive at the current levels as the share price has declined more than 6% this year, but without earnings growth, we remain concerned about future distributions.