Answer:
The 529 plan is a type of tax-advantaged saving plan.
Explanation:
This type of plan is designed to help saving for the future education.
Their legal name is “qualified tuition plans,” and they have been authorized by Section 529 of the Internal Revenue Code.
The two types of these plans that exist are:
- Prepaid tuition plans: The saver buys credits in public colleges and universities for future compulsory enrollments. Its advantage is that the price paid is the current price.
- Education savings plans: They allow opening an investment account for future education expenses of the person requesting it.
