The 529 College Savings Plan just got a face lift. What is a great way to save for college now is also a great way to save for prep school. First a refresher. With a 529 plan, a parent — or family member such as a grandparent — funds a savings account with after-tax money (no federal tax deduction up front) and all the earnings on the account accumulate tax-free, assuming they are used for qualified expenses such as tuition, certain fees, room and board, etc.

In December, the new tax law sweetened the pot for 529 plan owners and now allows tax-free distributions for public, private or religious elementary and high school expenses up to $10,000 per year per beneficiary. For a town like Fairfield with such great schools as Fairfield Prep and Notre Dame, not to mention all the other great schools in Fairfield County, parents with ambitions of sending their children to private school may want to consider ramping up their savings into 529 plans.

In addition to the tax benefits of 529s, there are financial aid considerations. A 529 is considered the parent’s asset for financial aid calculations, not the student’s. This is important, as parental assets receive favorable treatment relative to student assets on most financial aid forms.

Sending a child to private elementary school, prep high school, and private college could cost a small fortune, and that’s for one child, let alone the cost for two or more. Starting to save today can only help. It all starts with having a plan. A 529 is but one of the many tools available for parents. For those interested in learning more, I am hosting a workshop at the Fairfield Continuing Ed Center March 20 and 27, “Investing in their future —four steps to college funding. Saving for a child’s education is an investment in their future. Now that’s a New Year’s resolution worth keeping.

Michael Aloi is a financial planner in Fairfield, 1300 Post Road, Suite 100A, and can be reached at maloi@sfr1.com. He is a registered representative with Summit Equities Inc. and a financial adviser with Summit Financial Resources Inc.