Do you think your child would rather take out loans to pay for college or have a high chance of having to pay for your medical care and living expenses in your elder years? They’d rather pay for college.
If you haven’t done the math to determine that you are investing enough to get to retirement by a comfortable age, then this should be your first priority. Don’t start saving for your child’s college education when you haven’t made a plan to take care of yourself first.
The basic advantage of a 529 plan is that you can contribute post-tax money and – as long as it is used for educational expenses – the money and the interest that has grown from it will not be taxed again.
It essentially functions like a Roth IRA, but for educational expenses instead of retirement. One advantage of a 529 plan is that by using one you have specifically “ear-marked” an account for the sole purpose of paying for college.