Comparison of PrePaid 529 Plans and Savings 529 Plans

If you are a parent, you probably worry about paying for your child’s college costs. Every state now offers 529 college tuition plans. There are two types - a prepaid plan and then a savings plan. A prepaid 529 College Tuition Plans is where a parent purchases units of tuition at a public in-state college or university. The downfall of this is that if you move or your child doesn’t go to a public college, you face stiff penalties for withdrawing your contribution. A savings based 529 plan is better for most families because it isn’t restricted to in state public schools. One major downfall though is that your contribution is invested in the stock market, so if the market is going poorly, your 529 plan can show losses instead of gains.