Two types of 529b are the prepaid or savings plan.
- 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.