College rivals: keep funding your 529 accounts, but watch out for proposed new LSAs, which could give college savings plans a run for their money.(Focuson: FinancialPlanning)(Lifetime Savings Account)

Research, April, 2004 by Uzelac, Ellen

Just two months ago, the 529 landscape could not have looked brighter, Assets were climbing--still are. Advisors were growing more comfortable with the sometimes confusing product. Best yet, clients themselves were asking about the college-savings plans.

But now, a proposal by President Bush to create the ultra-flexible Lifetime Savings Account may imperil the very existence of the 529, itself being targeted for change by the U.S. Treasury Department.

Even so-called "529 guru" Joe Hurley, founder of Savingforcollege.com and one of the product's best known cheerleaders, was grousing recently about what he calls the anti-529 fervor building in Washington. "Call me paranoid," Hurley wrote in a column on his website, "but I get the feeling the federal...

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