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Contributed by mm | September 11, 2006 5:52 AM PST
You probably already heard about 529 plans, but do you know there are actually two types of 529 plans: prepaid and savings?
From Saving for College:
It's an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. As long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits to you, the plan participant (Section 529 of the Internal Revenue Code).
529 plans are usually categorized as either prepaid or savings, although some have elements of both. Every state now has at least one 529 plan available. It's up to each state to decide whether it will offer a 529 plan (or possibly more than one), and what it will look like. Educational institutions can offer a 529 prepaid plan but not a 529 savings plan (the private-college Independent 529 Plan is the only institution-sponsored 529 plan thus far).
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Best 529 Plans (September 15, 2006)
Wondering how to choose from the dozens of 529 plans available in the market? Kiplinger picked the following four plans as the best of the pck.
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