Maine or Vanguard 529 plan

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Topic Author
drewmo
Posts: 133
Joined: Sun May 04, 2008 4:05 am
Location: USA

Maine or Vanguard 529 plan

Post by drewmo »

Hello everyone,

I would love your opinion on this.
I'm shopping around for a 529 plan for my 7 month old son.
We have 5k to invest. We claim residency in Maine.
The benefits that we may be eligible for is the $25 annual fee waived, a state matching grant up to $200 and a rebate on the ME admin. fee.
We are not eligible for a tax deduction.

The funds that looked most interesting to me under the Maine 529
was BlackRock Age-Based 0-7 Years with an annual fee of .97% or the
BlackRock Equity Index Portfolio (BR 500 Index) with an annual fee of .43%.

Otherwise we would go with one of the Vanguard 529 plans.

My question is - does ME 529 plan, with all the rebates, is a better choice financially despite being more expensive than Vanguard?


2nd question - What's a better choice, going with an aged based fund or Equity Index?


Thanks for your help
avalpert
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Joined: Sat Mar 22, 2008 4:58 pm

Post by avalpert »

Is that $200 a year or total?

If it is annual than from a pure math standpoint the cost of the Maine program will be lower than the cost of Illinois (the cheapest vanguard 529) at around $27000 with the target fund and 90000 in the index fund alone.

As for which to choose, there are various schools of thought around here - if you include it as part of your overall portfolio allocaiton you can put it all in the index and use it as (part of) your large cap asset allocation; if you want to keep it as a separate allocation you probably want more diversification than a large cap index and don't want it all in equities.
Topic Author
drewmo
Posts: 133
Joined: Sun May 04, 2008 4:05 am
Location: USA

Post by drewmo »

Thank you for your reply avalpert.
Is that $200 a year or total?


$200 total.

My husband is telling me that I'm splitting hairs here. So we'll just keep it simple and go with the aged based Maine 529.

Thanks again
10106106
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Joined: Mon May 02, 2011 5:35 pm

Re: Maine or Vanguard 529 plan

Post by 10106106 »

I am in the same boat. I have read a lot of negative reivews on the Maine plan. I was looking at a Vanguard plan. Anyone else have any input?
Gauntlet
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Joined: Wed Nov 30, 2011 9:06 am

Re: Maine or Vanguard 529 plan

Post by Gauntlet »

I use the Vanguard plan. I like it. The expense ratio for the age-based solution is .25. The age-based solution has my favorite funds: Total US, International, and US Bond. The Vanguard plan also doesn't have any annual fee.
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C8H18Engineer
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Re: Maine or Vanguard 529 plan

Post by C8H18Engineer »

What is the "Vanguard" plan? I thought all of these required state sponsorship, and the ones I see where Vanguard is the fund provider, ER's are about 0.46%. Is there a plan that is state-independent? If so, does it almost always pay to go with your state of residency if there is a state tax deduction?
inbox788
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Joined: Thu Mar 15, 2012 5:24 pm

Re: Maine or Vanguard 529 plan

Post by inbox788 »

10106106 wrote:I am in the same boat. I have read a lot of negative reivews on the Maine plan. I was looking at a Vanguard plan. Anyone else have any input?
Which Vanguard plan? The Nevada Vanguard plan seems to have higher fees than NY, Utah or Ohio, and others.
Rupert
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Joined: Fri Aug 17, 2012 12:01 pm

Re: Maine or Vanguard 529 plan

Post by Rupert »

I believe the only Vanguard 529 plan is the Nevada plan. Its fees average .28% according to the Vanguard website. Industry average for direct-sold 529 plans is .58%, again according to Vanguard website.
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TomatoTomahto
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Re:

Post by TomatoTomahto »

drewmo wrote:Thank you for your reply avalpert.
Is that $200 a year or total?


$200 total.

My husband is telling me that I'm splitting hairs here. So we'll just keep it simple and go with the aged based Maine 529.

Thanks again
This is probably too late, but if it were me (and it was me, but in NJ) I'd use Vanguard, rebates aside. The difference in ER will add up, since your child is so young. FWIW, using Vanguard kept it pretty simple.
I get the FI part but not the RE part of FIRE.
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