The beauty of a 529 education-savings plan is that contributions grow tax-free and withdrawals are not taxed if used for qualified educational purposes. But investors who buy these plans from investment advisers and brokers rather than directly from the plan’s manager or a state’s designated vendor are at a disadvantage. Buying through middlemen could leave you with fewer investment choices,
steep commissions, and higher expenses as well as missing out on a state tax deduction.WHAT TO DO:
To choose the right 529, learn more about the plans, review plan ratings, and find links to plan vendors at www.savingforcollege.com.