NASD Says Do Your Homework On 529 Plans

December 24, 2004 08:37 PM

NASD Says Do Your Homework On 529 Plans

Excerpt: The NASD urges investors to do their homework before buying a 529 College Savings Plan.

The NASD urges investors to do their homework before buying a 529 College Savings Plan.

Fees, expenses, tax incentives and returns vary from state to state, and investors therefore should look for the best deal (see: "Start Saving For College Now").

"The good news is that there's no shortage of plans available," said Mary Schapiro, NASD vice chairwoman. "Every state offers at least one 529 plan, and there are currently more than 80 college savings plans to chose from. But no two plans are the same, so you have to choose carefully."

NASD issued an alert in an effort to help investors find the best deal. A continuing NASD examination that now involves 20 brokerage firms found many investors who buy the savings plan through brokers buy an out-of-state plan and may not get the best deal.

The plans, named for the section of the tax code that created them, now total about $43 billion in assets. In 2001, withdrawals became tax free at the federal level for tuition, books and other qualified expenses. About half the states offer tax breaks for contributing to their plans.

READ FULL STORY ...

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Lately, Frank Vellucci is feeling like no good deed goes unpunished. In late 2003, the 32-year-old Manhattan corporate attorney set up 529 plan college-savings accounts for his six nieces and nephews, keeping the accounts in his name and naming each child as a beneficiary. Recently ...

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Read all 10 posts in the same category of College:

Flaws Showing in 529 Plans for College Savings - Feb 20, 2005
Utah, Alaska Among Top 529 Plans - Feb 13, 2005
Start Saving For College ASAP, If You Can - Feb 05, 2005
Online Banks Are Boosting Yields Online Banks Are Boosting Yields - Jan 15, 2005
Financial-Aid Rules Sow Confusion for 529 Owners - Jan 15, 2005
Pay Now, Learn Later - Dec 24, 2004
Is Yale a Waste of Money? - Dec 24, 2004
An Expensive Education - Dec 24, 2004
A Lesson in Saving for College - Dec 23, 2004

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