Re: College Education Plan(529)
We have one for each of our kids. Watch out, because there are two different types - prepaid tuition and college savings. We use the college savings plan, and chose the option of bond mutual funds. Earnings on it are not taxed, although there is a penalty if you withdraw the money and don't use it for college expenses. You can contribute up to $200,000 per child. The money can be used for tuition, books, fees, room & board, etc.
Sometimes prepaid tuition plans can be a better deal, especially if you are settled in a particular state and have a strong desire for your child to go to an in-state school there.
Earning is not taxed only in those cases where you contribute from post-tax money. But if you contribute from Pre-tax money then it will be taxed. Correct me if I am wrong.
I am really tring to find out what are the different criteria one must look for when searching for 529 Plan. How do one compare one with other?