Saving for College

Get yourself in the know on 529 plans, a better alternative to savings bonds and education IRAs

Remember this scene? Your eighth-birthday party. Grandma slips you a small package. Your heart sinks: it's not a Walkman. Grandma leans in close. "It's a savings bond," she says with a wink. "It will help put you through college." That's still the way too many people plan to save for a child's education. Nearly all parents know savings bonds, and a lot have heard of education IRAs. But not nearly enough know about what could be one of the best investments for college: 529 plans.

"It's a missed opportunity," says Andrea Feirstein, director of college-savings plans for Salomon Smith Barney....

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