I recently had a friend that asked me about a plan that allowed for someone to contribute to a savings account for college and it grow with interest that plan would be the 529B. The 529B is a tax-advantaged investment plan in the U.S. designed to encourage saving for the future college expenses of a specific child/person.
Two types of 529b are the prepaid or savings plan.
Prepaid:
Two types of 529b are the prepaid or savings plan.
Prepaid:
- These plans allow one to purchase tuition credits at today's rates to be used sometime in the future.
- Prepaid plans may be administered by states or higher education institutions.
- How well this plan performs will depend on how fast inflation rates go up for college credits.
- Savings plans are different in growth depends on stock market, typically in the way of mutual funds.
- Majority of 529 savings plans offer different age-based asset allocation options where underlying investments become more conservative as the beneficiary gets closer to college age.