Encyclopedia of Investment Terminology

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529 Plan (College Savings Plan)

The 529 plan has become a popular investment option among parents. This is a tax-advantaged plan where money from one’s salary can be moved into a separate account to pay for a child’s college education. The money that works here is devoted exclusively to education funding purposes. Therefore it will be important for a person using this plan to avoid over-funding it. Also, while many schools can accept money from 529 plans, some will not.

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