Saving for a Child’s Future: What Mississippi Families Should Know About College Savings Options
Planning for a child’s future can start long before college applications or career decisions. For many families, saving early can help create more options later, whether a young person chooses a four-year degree, community college, workforce training, a credential, or another path after high school.
Families have many ways to save for education and other future expenses. Some options are designed specifically for education, while others can provide greater flexibility. New federal opportunities, including accounts established under Section 530A of the federal tax code, are adding another option for families to consider.
No single savings account is right for every family. Understanding the differences can help parents and caregivers make informed decisions and know where to turn when they are ready to use the money they have saved.
What options should families know about?
529 Education Savings Plans
529 plans are designed specifically to help families save for education. Contributions are invested and can grow over time, and withdrawals for qualified education expenses can generally be made without federal income tax. 529 plans are education-focused, but federal rules allow some circumstances in which unused funds may be used for other purposes. Families should review the current rules before making a withdrawal.
Mississippi families have two 529 options through Mississippi College & Career Savings: the Mississippi Affordable College Savings (MACS) program, a tax-advantaged savings account that can be used for eligible education expenses at in-state and out-of-state institutions, and the Mississippi Prepaid Affordable College Tuition (MPACT) program, which allows families to prepay tuition at today's rates. MACS can be used for a range of eligible education expenses, including qualified costs at universities, community colleges, and certain career and technical education programs. Families may also want to research 529 options offered by other states to see which plan best fits their needs.
Look for local savings opportunities, too.
Some employers, utilities, community organizations, and other partners offer programs that help eligible families get started with education savings. For example, Entergy Mississippi's Kids to College program, offered in partnership with the Children's Foundation of Mississippi, provides eligible families with assistance opening a child savings account. These opportunities may have specific eligibility requirements or limited enrollment, so it can be worth asking whether your employer or a community organization you work with offers a similar benefit.
530A Accounts
Section 530A of the federal tax code establishes a new type of tax-advantaged investment account for children. You may also hear these accounts referred to as “Trump Accounts,” the name used in federal law and by the Internal Revenue Service.
Children born between January 1, 2025, and December 31, 2028, who meet federal eligibility requirements may qualify for a one-time $1,000 contribution from the U.S. Treasury. An authorized individual must take action to establish the account and request the contribution. Enrollment is not automatic. Other contributions may also be possible, subject to federal rules and contribution limits.
Unlike a traditional college savings account, a 530A Account is intended to provide a financial foundation that can extend into adulthood. The money is invested during the child’s early years, and different rules apply once the child reaches age 18. Investment values can rise or fall, and taxes or penalties may apply to some withdrawals. Families should review current IRS guidance before contributing to or withdrawing money from an account.
Coverdell Education Savings Accounts
A Coverdell Education Savings Account, or ESA, is another education-focused savings option. Contributions can be invested and may grow tax-free when used for qualified education expenses. Coverdell ESAs have specific eligibility, contribution and withdrawal rules, including limits on who can contribute and how much can be contributed each year. Coverdell ESAs may provide flexibility for certain education expenses, including some expenses before college, but their rules differ from 529 plans.
How do I access the money I've saved?
This is a question that families often have after spending years putting money aside:
“I have an account. How do I get the money when my child needs it?”
The answer depends on the type of account. The process may also vary by financial institution or plan administrator. A good place to start is with these steps:
1. Find out what type of account you have
Look at your account statement, online account, or other paperwork to identify the type of account. You may have a 529 plan, custodial account, 530A Account, or another type of savings or investment account. If you are not sure, contact the financial institution, plan administrator, or organization that helped establish the account.
2. Check the rules for using the money
Before requesting a withdrawal, find out:
What expenses qualify?
Are there limits on how much you can withdraw?
Who can request the money?
Does the money need to be paid directly to a school or provider?
What documentation or receipts should you keep?
Will taxes or penalties apply?
Do not assume that because money was saved for a child, it can be used for any expense without tax consequences.
3. Contact the account provider
Most accounts have a financial institution, state program, plan administrator, or other provider that handles withdrawals. Look for a “Withdraw,” “Distribution,” “Take Money Out” or similar option in the online account. If you cannot find it, call the provider and ask what steps are required.
4. Gather the information you need
Depending on the account and the withdrawal, you may need information such as:
The account number
The child’s or account owner’s information
The amount being withdrawn
The reason for the withdrawal
Information about the school or qualified expense
Receipts or other documentation
Keep records of how the money is used, particularly when tax rules depend on whether an expense qualifies.
5. Ask questions before you withdraw
If you are unsure whether a withdrawal is allowed or whether it will create a tax consequence, stop and ask before taking the money out. Your account provider can explain the rules that apply to your specific account. A qualified financial or tax professional can also help families understand how a withdrawal may affect their individual situation.
What if I don't know where my child's account is?
It is not unusual for families to lose track of an old account, forget which provider manages it, or have questions about an account that was established years ago. Start with the organization that originally helped establish the account. Check old statements, tax records, emails, or other paperwork for the name of the financial institution or program.
For state-sponsored education savings plans, start with the state program's official website or customer service team. For federal programs such as 530A Accounts, use current information from the Internal Revenue Service and other official federal resources.
If you are helping another family navigate the process, schools, college access programs, community organizations and other trusted partners can also help families identify reliable information and connect with the appropriate resource.
Saving is only part of the picture
A savings account can help make education and other future opportunities more affordable, but families do not have to figure out the entire cost of college on their own. When the time comes to pursue education or training after high school, families should also explore scholarships, grants, and federal and state financial aid programs.
For Mississippi students, completing the Free Application for Federal Student Aid (FAFSA) is an important step in determining eligibility for federal, state, and institutional financial aid. Saving does not mean choosing only one path. A family might use a combination of savings, scholarships, grants, financial aid, and other resources to help pay for education or training.
Start with what works for your family
There is no one-size-fits-all approach to saving for a child's future. For some families, a 529 plan may be the right fit. Others may consider a custodial account, a Coverdell ESA, a retirement account, or, for eligible children, a 530A Account. Some families may use more than one type of account. The important thing is to understand what you have, know what the account can be used for, and understand the rules before you need the money.
For Mississippi families, access to accurate information is an important part of that process. Knowing that an opportunity exists is the first step. Knowing how to access and use it is just as important.
At Woodward Hines Education Foundation, we believe expanding opportunity means helping Mississippians access the information, resources and support they need to pursue education, meaningful employment and financial security.
Whether you are just beginning to save, already have an account or are trying to figure out how to use savings you've accumulated, start by learning what options are available and connecting with the official resources that can help you make informed decisions.
This article is provided for informational and educational purposes only. It is not financial, tax, or legal advice. Savings and investment accounts have different rules, risks, and tax implications. Families should review current official guidance, plan documents, and required disclosures and seek qualified financial or tax advice when appropriate.