Which States Offer The Best 529 College Plans?
Are you aware that you don’t necessarily have to stick with your own state 529 College Plan? Many states will let you use their plan even if you don’t live there. Of course some won’t so check to make sure before you invest any money. But it certainly pays to shop around. When you are talking about savings plans for college there is no single plan that has everything that you want. Each state plan has advantages and disadvantages. Some states are better overall. If you feel that you are good at investing, then most states will let you specifically choose which accounts you can invest in.
If, like most people, you have no experience in investing, it’s usually best left up to the experts. So, which states have the best plans? Obviously it depends where you looking and what you want out of them. For instance if you were wanting to save money on fees, your best bet would be to go with the Utah Educational Savings Plan Trust. This plan has a portfolio of nine-index funds that charge only 0.38% per year in fees. This plan also only charges 4.00 per 1,000 of your account balance. If you’re looking to save money on fees then this is a great option. Add in the tax breaks that you may be eligible for and this plan is perfect for low fees.
If you would prefer to stay conservative, the Michigan state plan will definitely help keep your mind at bay. The Michigan Educational Savings program is perfect for the investor who is unsure about risking their money in the stock market. This plan has a savings option that guarantees the principal and a minimum annual interest rate based on a treasury note. This plan is titled more towards bond funds than most 529 plans. Bond funds are traditionally much more stable than the stock market. This plan also has low fees that make it ideal for the investor who doesn’t like to take a lot of chances with his money.
Arguably the best “all-round” plan belongs to the state of Virginia. If you feel comfortable placing your trust in an advisor then this is the plan for you. The Virginia College America Plan will cost you more when using an advisor, but in the long run it could be worth it. They will craft a portfolio with 22 top-notch funds from American Funds. The advantage of using this plan is that it is easy to set and forget. When you have less time on your hands this is a plan that you can sit back and watch your investment grow.
As you can see there is no straight out answer for choosing a 529 College Plan, it is very dependant on your individual circumstances. Many states have great plans in place while others are not so good. It depends a lot on what kind of plan you are looking for and how you would like the money invested. Some investors choose to take the stock market while others love the bonds and mutual funds. Each plan has its pluses and minuses just like anything else. There are other important considerations that you need to take into account such as taxes. Just make sure you shop around as each state is competing to get more customers and they are constantly updating their plans.
529 college plans vary greatly so take your time and do your research into which state fits your needs the best. After you are done you will probably find out more than one state will do the job for you. You might also want to check out other creative ways to get money for college.
