Backer / 529 Plans Made Simple & Easy to Manage

Backer review quick take: A simple and easy way to save for education using 529 plans.

What is Backer?

Backer is a robo-advisor platform that makes it easy to select, manage, and contribute to 529 plans. 

The company has helped over 200,000 families save over $30 million for college and avoid over $500 million in future debt. The mission is to make college affordable for every American family through collaboration and investment options.

Backer is a trademark of Principly, Inc., an SEC-registered investment advisor. 

Start your child’s college savings in 5 minutes.

What is a 529 Plan?

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. “529 plans, legally known as qualified tuition plans, are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.” (SEC)

Please note the parents, not the child, own the 529 plans. 

Why Use 529 Savings Plans?

• Tax-free investing: Contributions to a 529 plan grow tax-free and withdrawn tax-free to pay for educational expenses.
• Flexible and versatile: Can be used for higher education, K-12, apprenticeships, and student loans.
• Transferable: Can be transferred within the family.
• Financial aid: Minimal impact on child’s eligibility for financial assistance compared to UTMA/UGMA accounts.
• Payoff student debt: Use a 529 plan to repay student loan debt.

How Backer Works

Backer 529 savings can be used to cover all kinds of education expenses, not just college tuition. Think books, supplies, housing, K12 tuition, boot camps, apprenticeships, and more.

Backer (former Collegebacker) manages your 529 plans and helps you build a team of supporters for your child, invest your savings tax-free, and stay on track of your savings goals. 

No more clunky websites, which are often associated with 529 plans. And no more sifting through 100s of 529 plans to determine which one to use. It’s all done for you through the platform.

Here’s how it works:

• Get a recommendation on a 529 plan that’s right for your family.
• Paperless setup with automated contributions.
• Invite family and friends to contribute using a customized page for your child.
• Earn cash back rewards by shopping at name-brand partners.

Backer does not hold your funds or use a broker to do so. Instead, it acts as an intermediary that simplifies the educational savings process. It provides a user-friendly interface and additional features to manage the 529 plan.

Start saving for your child’s education in less than 5 minutes.

Key Benefits

• Account Minimum: No minimum investment amount needed.
• Easy Setup: Set up a child’s account in under 5 minutes.
• Robo-advisor: Get a recommended plan based on where you live.
• Intuitive Platform: Access your plan history and contribution seamlessly.
• Gifting: Get family and friends involved with gifts using a customizable gifting page.

Pricing & Fees

There are two options:

Free Tier: $0

• One 529 account
• Gifters pay $1.99 per gift

Pro Tier: $4

• Up to give 529 plans
• Gifters pay no fees
• Priority customer support

Who is it best for?

Backer is best for parents or guardians who want to effortlessly save for a child’s education expenses and enjoy tax advantages.  

Start saving in less than 5 minutes.

Backer Review

Backer is a legitimate company. It has a 4.7 rating out of 5 stars in the App Store with close to 400 reviews. The platform provides an easy platform to save for educational expenses using tax-advantaged 529 plans. 

In researching for our Backer review, we learned the platform helps parents and guardians save for future educational expenses while saving on taxes. The platform does a great job of removing the complexity around 529 plans. It also reduces the overwhelming feeling some may feel when choosing the right state plan.

Backer is a good platform to help you save for future education expenses, including college, by having your family and friends join in. Through the gifting page, supporters can contribute to your child’s 529 plan instead of buying material gifts that would be discarded.

Have a birthday party for your child? Let your guests know they can contribute to the fund instead of buying a gift.

Pros and Cons

Pros

• Tax-advantage college savings
• Low fees
• No account minimum
• Gifting page for family and friends

Cons

• No human advisor access

How to Start Using Backer 529 Plans

Minimum Requirements

To open an account on behalf of a child, you must be:

• 18+ years old
• US Citizen or Permanent Resident

There are no age or income requirements to contribute to the account.

Step-by-Step to open a Backer account

The time needed: 5 minutes

1. Getting started
   • Visit the website or use this link to get started.
2. Enter your personal information
   • Answer a few questions to get Robo-advice based on your answers.
3. Start your 529 plan
   • Begin investing for your child’s future.

Backer Alternatives

We haven’t seen any direct alternative to Backer. However, you can invest using 529 plans through select online brokerages or set up custodial accounts, like UTMA/UGMA accounts, for a child.

Find other options in the financial marketplace. 

Backer FAQs

What happens if you want to cancel Backer?

If you’re unhappy with the service, you can keep your 529 plan. However, you’ll lose access to the website and mobile apps and the features helping you manage that plan. 

What happens to your 529 plan if your child doesn’t attend college?

If your child doesn’t attend college, you can change the beneficiary to another who can use the funds. Otherwise, if you withdraw the money for other reasons, you’ll incur a 10% penalty plus taxes at your current income rate.