Section 529 Prepaid Tuition Plans: A Low Risk Investment with Surprising Applications

Neath, Mark C.
April 2002
Journal of Financial Planning;Apr2002, Vol. 15 Issue 4, p92
Academic Journal
This article discusses and highlights the historical investment performance of Section 529 state prepaid tuition plans. It shows that a hypothetical national prepaid tuition plan would have produced an annualized after tax return of 6.3 percent since 1991-1992, with a standard deviation of only 2.7. The article argues that this unique high return/low risk combination makes prepaid tuition plans attractive for many investors who may, in addition, find them useful for a range of financial planning goals beyond saving for a college.


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