A 529 College Savings Plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future high education expenses of a designated beneficiary.
- Prepaid Plans allow one to purchase tuition credits at today's rates, to be used in the future. Performance is based upon tuition inflation.
- Savings Plans are different in that all growth is based upon market performance of the underlying investments which typically consist of mutual funds. Most 529 plans offer a variety of age-based asset allocation options where the underlying investments become more conservative as the beneficiary gets closer to college age.
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