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Before the advent of 529 plans, UGMA accounts were the principal method of saving for college. When state administered 529 plans were created by Congress in 1996, conventional wisdom said they were the new preferred method for college savings. Now many states are perilously close to bankruptcy and are charging high fees for 529 plans. Nine states have closed the pre-paid tuition plans. It is time to revisit the question of 529 plans versus UGMA accounts. This short story explores the issue of whether 529 plans or UGMA accounts are the best method of saving for college. After reading this short story, you will be able to make your own well-informed decision on the best method of saving for college.
