A state-operated investment plan that gives families a federal tax-free way to save money for college. Authorized by Congress in 1996, they are officially known as qualified tuition programs (QTPs), but commonly referred to as 529 plans, state 529 plans, or section 529 plans after the section of the IRS code that provides the plans' special tax breaks.

These tax breaks are a definite benefit but these plans do require you to use these funds for education only. If your child receives a full scholarship you can transfer the funds to another child. Some of our clients have asked for more flexibility so we help them develop strategies using other products that provide for tax breaks, growth, and/or more flexibility.