Which 529 plan?

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Which 529 plan?

Postby smurflady » Mon Jan 28, 2013 12:31 am

Any recommendations on which 529 plan is best when there is no state deduction? NY seems to have the lowest fees but I don't like the big changes in the aged based AA every 5 years. Should I just go with a state that has an AA that I like and reasonable fees (under 0.3%)?
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Re: Which 529 plan?

Postby mickcris » Mon Jan 28, 2013 8:25 am

smurflady wrote:Any recommendations on which 529 plan is best when there is no state deduction? NY seems to have the lowest fees but I don't like the big changes in the aged based AA every 5 years. Should I just go with a state that has an AA that I like and reasonable fees (under 0.3%)?


You can set up your AA however you want in the NY plan by using the individual portfolios. Then adjust it yourself when you feel it is appropriate:
https://uii.nysaves.s.upromise.com/cont ... tions.html

You can also do this in the Utah plan that has a very low ER also:
http://www.uesp.org/Investment-Info/Cus ... tions.aspx
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Re: Which 529 plan?

Postby feh » Mon Jan 28, 2013 11:40 am

mickcris wrote:
smurflady wrote:Any recommendations on which 529 plan is best when there is no state deduction? NY seems to have the lowest fees but I don't like the big changes in the aged based AA every 5 years. Should I just go with a state that has an AA that I like and reasonable fees (under 0.3%)?


You can set up your AA however you want in the NY plan by using the individual portfolios. Then adjust it yourself when you feel it is appropriate:
https://uii.nysaves.s.upromise.com/cont ... tions.html

You can also do this in the Utah plan that has a very low ER also:
http://www.uesp.org/Investment-Info/Cus ... tions.aspx


We live in WI but chose the Utah plan. That was 10 years ago, so the landscape may have changed, but it was a great plan.
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Re: Which 529 plan?

Postby robocop » Mon Jan 28, 2013 5:58 pm

Be careful if you want to change account owners- the NY plan does NOT allow ownership changes to the account.

That made it a dealbreaker for me (an aunt), who is opening the account but may want to change ownership to the parents in the future depending on our situation.

I decided to stick with WI, as it has very low expenses if you have a 2 fund portfolio (total US stock and bond index funds)- stock is .15 and bond is .21. It permits change in ownership, which is also convenient.
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Re: Which 529 plan?

Postby JamesSFO » Mon Jan 28, 2013 6:56 pm

What's your home state by the way and who is the provider? I went with the CA plan when it was with Fidelity and stuck with it at TIAA-CREF and the passive choices are quite low ERs passive age based investments are 0.20-to-0.30 ER and there are individual passive investments around that same range.

I personally preferred it at Fidelity, but the TIAA-CREF options are fine and the phone/web support is fine.
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Re: Which 529 plan?

Postby lwfitzge » Mon Jan 28, 2013 6:58 pm

we chose Vanguard Nevada plan..
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Re: Which 529 plan?

Postby Snikda » Mon Jan 28, 2013 7:10 pm

i have started 529s for my two boys over the past two years... both with Utah (http://www.uesp.org), which has made the top 5 best 529 list from multiple raters/publications many times over the years.
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Re: Which 529 plan?

Postby kenyan » Mon Jan 28, 2013 7:11 pm

Most of the excellent plans have been noted above: NY, NV, UT (using Vanguard funds); CA, WI (TIAA-CREF).

The large AA changes in the age-based NY plan turned me off as well initially, but you can just set your AA manually. If you don't want to deal with that, don't go for the NY plan.

NV has a larger initial investment requirement than the other plans, $3k. One very minor benefit would be that it counts toward your Vanguard Flagship status, if that matters to you.

The TIAA-CREF plans have a Stable Value option that has a better yield than cash accounts.

I am investing in both the NY and CA plans for different children.
Retirement investing is a marathon.
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Re: Which 529 plan?

Postby brisni » Mon Jan 28, 2013 7:28 pm

For my older kids, I have been using Vanguard NV. However, for my newborn last year, I decided to go with Fidelity's UNIQUE.
It has index funds with ER down to 0.25%. You can also get their American Express card which has 2% rebate going into the 529.

- Brian
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Re: Which 529 plan?

Postby JamesSFO » Mon Jan 28, 2013 7:42 pm

kenyan wrote:Most of the excellent plans have been noted above: NY, NV, UT (using Vanguard funds); CA, WI (TIAA-CREF).

The large AA changes in the age-based NY plan turned me off as well initially, but you can just set your AA manually. If you don't want to deal with that, don't go for the NY plan.

NV has a larger initial investment requirement than the other plans, $3k. One very minor benefit would be that it counts toward your Vanguard Flagship status, if that matters to you.

The TIAA-CREF plans have a Stable Value option that has a better yield than cash accounts.

I am investing in both the NY and CA plans for different children.


Good summary!
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Re: Which 529 plan?

Postby Calhoon » Mon Jan 28, 2013 8:32 pm

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Re: Which 529 plan?

Postby smurflady » Mon Jan 28, 2013 9:42 pm

Thanks all - I decided on the UT plan. I like being able to set a custom AA that changes over time - set it and forget it!
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Re: Which 529 plan?

Postby fabdog » Tue Jan 29, 2013 10:59 am

For our grandson we started in the Utah plan until we got to $3K, then moved to the NV plan. Utah has no minimum and all Vanguard funds but does charge a small administrative fee on assets, and there is a separate fee for maintenance which can be avoided by getting statements online

Mike
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Re: Which 529 plan?

Postby Gustie13 » Fri Feb 01, 2013 3:28 pm

Does anyone do different 529s in different states for the same beneficiary?
Here is why I ask: My friends live in MN and can't get any state tax deduction so they could pick whichever state plan they prefer for their newborn but they have grandparents in states that do offer a tax deduction, so would it make sense for the grandparents to start a separate 529 for the same newborn?
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Re: Which 529 plan?

Postby JamesSFO » Fri Feb 01, 2013 4:24 pm

Gustie13 wrote:Does anyone do different 529s in different states for the same beneficiary?
Here is why I ask: My friends live in MN and can't get any state tax deduction so they could pick whichever state plan they prefer for their newborn but they have grandparents in states that do offer a tax deduction, so would it make sense for the grandparents to start a separate 529 for the same newborn?


My guess is lots of people do this, but to be clear there is a pair:

PARTICIPANT and BENEFICIARY

So you are talking about:

Grandparent 1/2 - Beneficiary 1 - Account in UT
Grandparent 3/4 - Beneficiary 1 - Account in IL
Parent - Beneficiary 1 - Account in NY

That is likely common and makes a lot of sense unless the grandparents want to cede control of the money to you.

What is likely to be uncommon would be for the same participant/beneficiary to have multiple accounts in different states.
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Re: Which 529 plan?

Postby ursineogre » Fri Aug 23, 2013 2:50 pm

I get the state tax benefits, but what is the end result in living in one state and using a 529 from another state? If I live in VA and have a 529 in NY, does that mean my kids have to go to college in NY? What if they want to go to college in Alaska?
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Re: Which 529 plan?

Postby EmergDoc » Fri Aug 23, 2013 3:33 pm

I like Utah's plan. But there are several others that I'd put in the same category.

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Re: Which 529 plan?

Postby cflannagan » Fri Aug 23, 2013 3:49 pm

I'm surprised nobody mentioned Ohio 529s? They were frequently named few years ago. Have they since fallen out of favorites list? We use Ohio (collegeadvantage.com)

They use Vanguard age-based funds (composition is similar to target retirement funds).
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Re: Which 529 plan?

Postby kaneohe » Fri Aug 23, 2013 4:03 pm

robocop wrote:Be careful if you want to change account owners- the NY plan does NOT allow ownership changes to the account.

That made it a dealbreaker for me (an aunt), who is opening the account but may want to change ownership to the parents in the future depending on our situation.

I decided to stick with WI, as it has very low expenses if you have a 2 fund portfolio (total US stock and bond index funds)- stock is .15 and bond is .21. It permits change in ownership, which is also convenient.


You may also want to use some caution w/ Fidelity.............They seem to be very consistent (from rep to rep to supe) that while ownership changes are allowed
they will issue a 1099Q upon such a change because they consider it a distribution. A small number of other 529 providers that I contacted said they don't do that because they consider it a transfer , not a distribution.
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Re: Which 529 plan?

Postby Keep It Simple » Fri Aug 23, 2013 4:04 pm

cflannagan wrote:I'm surprised nobody mentioned Ohio 529s? They were frequently named few years ago. Have they since fallen out of favorites list? We use Ohio (collegeadvantage.com)

They use Vanguard age-based funds (composition is similar to target retirement funds).



x2
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Re: Which 529 plan?

Postby JamesSFO » Fri Aug 23, 2013 8:04 pm

ursineogre wrote:I get the state tax benefits, but what is the end result in living in one state and using a 529 from another state? If I live in VA and have a 529 in NY, does that mean my kids have to go to college in NY? What if they want to go to college in Alaska?


529 != prepaid tuition. You can have a 529 plan from any state and the kid can go to college anywhere.
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Re: Which 529 plan?

Postby robertalpert » Fri Aug 23, 2013 10:14 pm

Utah has very low ER costs and also has both Vanguard and DFA funds available.

I personally chose Ohio529 because among their Vanguard funds include Wellington, Extended-market, and a few others.
I am an Ohio resident.
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Re: Which 529 plan?

Postby sksbog » Fri Aug 23, 2013 10:19 pm

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