529 plans can be one of the most attractive ways to help a loved one save and pay for college. There are two types of 529 plans: pre-paid tuition plans and college savings plans. They offer special tax and gifting benefits and provide great flexibility and control to the donor. 529 plans are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Whether you are saving for your loved ones or for yourself, you need your money to work hard for you to keep up with the rising costs of education. 529 plans offer:

• tax-deferred growth - your earnings grow with federal taxes deferred and can be reinvested, helping you build savings over time;
• tax-free withdrawals. You can make withdrawals for qualified educational expenses such as tuition, fees, books, on and off campus room and board, and even certain expenses for special needs students, all free from federal income tax.2

2 Tax provisions allowing for federal income tax-free withdrawals for qualified expenses will expire on 12/31/10 unless extended. State laws and treatment will vary. Earnings on non-qualified distributions will be subjected to a 10% penalty.