What is the disclosure document for a 529 college savings plan?

The disclosure document for a 529 college savings plan is the official statement. This document is crucial as it provides detailed information about the plan, including investment options, risks, fees, and other important features. It serves to inform potential investors about the particulars of the plan, enabling them to make educated decisions regarding their investment in higher education savings.

The official statement is comprehensive and typically includes sections on tax advantages, how contributions work, state-specific benefits, and any possible penalties for withdrawals not used for qualified educational expenses. This transparency helps investors better understand the terms of their investment and what to expect in terms of performance and obligations.

While the other choices represent different types of documents—such as an investment letter which is more informal, a preliminary prospectus which is common for securities but not specifically for 529 plans, and a letter of understanding which typically outlines agreements but lacks the specificity and detail required for investment decisions—they do not fulfill the role of providing a thorough overview of the 529 plan. The official statement is the designated document that addresses the necessary transparency and educational needs of potential investors in this specific type of savings plan.