529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

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ronin
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529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by ronin » Sun Apr 12, 2015 3:33 pm

My apologies if this topic has been beaten to death in older posts, however others have rightly pointed out that the 529 landscape seems to change over time. OK, to break it down, I'm thinking about starting a 529 plan for my 1 year old and eventually for the next one due to arrive this fall. State tax deductions are a moot point for me, but low-costs are not (the Boglehead way).

My first decision is considering a regular 529 plan vs. Prepaid plan (WA State GET). The WA GET premium is currently about 46% percent which seems high, but others have likened this to to a comparable low-risk bond investment (similar returns). That is, one should use this approach if you are most concerned about managing risk versus being able to potentially contribute less in a regular 529 with the idea of capturing higher returns. Any thoughts on this decision?

Secondly, Of the more common type of 529 plan choices, I've narrowed it down to either the Utah or Nevada plans. It would seem the only compelling reason to choose the Nevada (Vanguard) plan over the Utah plan would basically boil down to being able to utilize the existing Vanguard login (online) access. Are there other compelling reasons to select Nevada over Utah? Otherwise, I got the impression the Utah plan's costs may be favorable, its website more flexible and easy to use, and its offering of investment choices and managing asset allocations more flexible.

Any thoughts on either or both of my two questions would be most welcomed.

Thank you!

Thanks!

anil686
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by anil686 » Sun Apr 12, 2015 4:47 pm

I use the Nevada out of simplicity of accounts - I find it okay - the cost differences are not marked. There is no access to DFA funds via Nevada (unlike Utah I believe) if that is what you are looking for. I live in Texas and there is no state income tax and thus no incentive to use the Texas 529 plan. I like having all the accounts on one screen - just my preference though...

drapnea
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by drapnea » Thu Apr 28, 2016 11:32 am

I had the exact same question so am bumping this topic.
Washington State GET program vs. a 529 with my current Vanguard account (thus a Nevada 529) or open a Utah 529.
Can anyone else shed some light on this from personal experience or otherwise?

Background info: Washington resident, maxing out 401k, his/hers backdoor Roth, HSA, and also contributing to a taxable Vanguard account monthly. Marginal rate of 30%, 2 kids aged 2 & 4, married file jointly. Planning on UW or other Washington state school for them but who really knows at this point.

ronin
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by ronin » Thu Apr 28, 2016 9:30 pm

Thanks for bump, drapnea.

Since my post I ended up electing to go with the Utah plan with no regrets. I thin since my original post there may have been more developments related to the GET plan whereby they were allowing people top exit the plan penalty-free due to the recent legislative action to cause state tuition to either freeze or possible drop over the coming years, rendering the GET shares less valuable at least in the short term.

Being a user of Quicken, I'm also pleased that the Utah plan's online system interfaces with it nicely for automatically downloading.

Let's see if others add any more perspective...

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White Coat Investor
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by White Coat Investor » Thu Apr 28, 2016 9:32 pm

I thought a few days ago we decided California was currently the best by a few basis points, no?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

drapnea
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by drapnea » Thu Apr 28, 2016 9:54 pm

Well I kept searching around (as I had been intermittently over the past few months) and read the same info about WA get program so I knocked that off the list since it could take at least 5 years for positive gains from what I understand. That left Nevada vs Utah at the top of my list. I ended up going with Utah after reading quite a few forum posts which basically led me to believe it is nearly a wash and I am better off (just like market timing) just picking something and sticking to it.

I elected for a Vanguard (NV) account to keep things simple, close enough costs, and put in $3k for my 4 year old. Next month assuming I don't come up with a reason not to, we will be doing the same for my 2 year old.
I elected for 100% into the aggressive age based investment for the time being so that I can just throw money into it and have it rebalance on its own. I don't do this for our retirement accounts, but thought it may be worth while with the kids so I don't have to deal with rebalancing on an age based system with 2 kids using it a few years apart.

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llama
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by llama » Thu Apr 28, 2016 10:00 pm

Isn't WA GET frozen for the time being? Last I heard, Olympia was thinking about setting up traditional 529 plan in addition to GET.

letsgobobby
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by letsgobobby » Thu Apr 28, 2016 10:13 pm

I just withdrew 1000 units from WA GET and sent it all to New York. With guaranteed 15% losses over the next 2 years, couldn't see any rationale for staying in.

Tommy
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by Tommy » Fri Apr 29, 2016 12:35 am

WA Get is good only for WA. What if child will go to out of state school? I decided not to limit myself and investing in Nevada

letsgobobby
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Re: 529 Plans - Utah vs. Nevada <or> WA State prepaid (GET)?

Post by letsgobobby » Fri Apr 29, 2016 12:37 am

Tommy wrote:WA Get is good only for WA. What if child will go to out of state school? I decided not to limit myself and investing in Nevada
WA is not only good for WA. WA GET allows transfer of the full benefit to any eligible school including many international schools. This, along with a constitutional guarantee, makes the WA prepaid tuition plan unique and worth considering for any risk averse investor.

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