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529 SAVINGS PLANS State-administered plans designed to encourage households to save for college education. Named after a part of the Internal Revenue tax code, these saving plans allow earnings to accumulate free of federal income tax and sometimes to be withdrawn to pay for college costs tax-free. There are two types of plans: savings and prepaid tuition. Plan assets are managed either by the stateís treasurer or an outside investment company. Most offer a range of investment options.
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The Insurance Definitions, Dictionary, Glossary and Terms are from the Insurance Information Institute.