Qualified tuition programs (QTPs), also called “529 plans”, have risks. One of the biggest risks in 529 Plans are market risks and performance volatility. This means the 529 Plan fund balances could be lower just at the same time those funds are needed for college tuition payments. (See ABC NEWS video link below)
To remove market risks and at the same time make sure adequate funds are available when college tuition payments are due, avoid the 529 Plan. Instead establish a Personal College Saving Plan. The Personal College Saving Plan eliminates market risks associated with the 529 Plans. PLUS if your children skip college, you will not pay taxes on the growth.
An added benefit with the Personal College Saving Plan, money can be withdrawn tax free for retirement income, buying a car, or other financial needs.http://www.fa-mag.com/news/morningstar–529-college-savings-plans-lag-traditional-mutual-funds–performance-14037.html?section=121
College Savings Decimated | Video – ABC Newshttp://abcnews.go.com/GMA/video?id=6028757#.UYbehcRzBUk.wordpress