CA resident 529

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Abk911
Posts: 21
Joined: Thu Aug 09, 2018 1:22 pm

CA resident 529

Post by Abk911 » Fri Aug 10, 2018 3:20 pm

Dear Bloggers,

i read some posts but still confused hence my question:

Why are many people recommending the Utah / Nevada plan for 529 even when they are CA residents. How does that work? am assuming there are no deductions allowed for CA 529 plan. But would that not be the same for a different state plan. in that case whats the benefit? also if one buys a nevada or utah plan do they have to have to send kid to those states or?

pls do help guide.

HEDGEFUNDIE
Posts: 1208
Joined: Sun Oct 22, 2017 2:06 pm

Re: CA resident 529

Post by HEDGEFUNDIE » Fri Aug 10, 2018 3:26 pm

The only reason people suggest Utah and Nevada 529s is because they include Vanguard funds, and if you have other assets with Vanguard, it will all count towards meeting Vanguard's Voyager or Flagship thresholds of service. You can still use the 529 money for college anywhere.

To be honest for a CA resident (or a resident of any state without a 529 tax deduction) it really doesn't matter which state's 529 you pick. They pretty much all have low-fee fund options.

thomase
Posts: 149
Joined: Fri Feb 13, 2009 7:48 pm

Re: CA resident 529

Post by thomase » Fri Aug 10, 2018 3:53 pm

I'm a long time California resident and have accounts with California Scholarshare program aka state sponsored 529 plan. It doesn't matter which state plan you choose, California does not offer a tax deduction for 529 contribution. You just choose the plan that has the choices you want or is convenient for you to manage. At one point I looked into rolling over the CA 529 to Vanguard plans, the only advantage being able to access all investments under one website, but I never went through with it. The CA 529 was managed by TIAA-CREF, moved to Fidelity, and now back with TIAA-CREF. I've already started withdrawing for college expenses, and no issues so far.

Abk911
Posts: 21
Joined: Thu Aug 09, 2018 1:22 pm

Re: CA resident 529

Post by Abk911 » Fri Aug 10, 2018 4:40 pm

so... if i want vanguard, i just cant do CA? or now do they have any CA plan?

NoHeat
Posts: 224
Joined: Sun Sep 18, 2016 10:13 am

Re: CA resident 529

Post by NoHeat » Sat Aug 11, 2018 12:00 am

I have used the 529 plans in four states, and they all offer Vanguard funds:
- the Utah plan formerly called UESP and now called my529,
- Illinois Brightstart,
- College Savings Iowa,
- Colorado CollegeInvest.
Probably other 529s offer Vanguard funds also, but I’ve used all these, and all provided me good service.

As mentioned by others, if you live in CA, there’s no reason to prefer a CA based 529 plan. I would suggest choosing a plan that has fees and funds you like, and disregard which state runs it. Luckily, 529 fees and fund offerings have improved widely since I started nearly 20 years ago.

Some programs offer unusual options. For example, there’s the stable value fund in Colorado CollegeInvest, which is better than a money market fund for the last few years before withdrawal, when you need stability. And there’s the my529fund which offers DFA funds as well as Vanguard funds.

thomase
Posts: 149
Joined: Fri Feb 13, 2009 7:48 pm

Re: CA resident 529

Post by thomase » Sat Aug 11, 2018 4:17 pm

Abk911 wrote:
Fri Aug 10, 2018 4:40 pm
so... if i want vanguard, i just cant do CA? or now do they have any CA plan?
That's correct, if you want the Vanguard 529 it won't be California. Also the California Scholarshare program does not have Vanguard fund choices, unlike some other state plans.

mega317
Posts: 2557
Joined: Tue Apr 19, 2016 10:55 am

Re: CA resident 529

Post by mega317 » Sat Aug 11, 2018 9:33 pm

If you're at Fidelity I'd use their 529. A few states use them.

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: CA resident 529

Post by PFInterest » Mon Aug 20, 2018 7:02 pm

Abk911 wrote:
Fri Aug 10, 2018 3:20 pm
Dear Bloggers,

i read some posts but still confused hence my question:

Why are many people recommending the Utah / Nevada plan for 529 even when they are CA residents. How does that work? am assuming there are no deductions allowed for CA 529 plan. But would that not be the same for a different state plan. in that case whats the benefit? also if one buys a nevada or utah plan do they have to have to send kid to those states or?

pls do help guide.
- they are the best, low cost, great option plans.
- for someone that does not get a home state deduction, they might be better.
- you can use any states plan, it doesnt matter. it doesnt decide where your children go. they do.

ccieemeritus
Posts: 566
Joined: Thu Mar 06, 2014 10:43 pm

Re: CA resident 529

Post by ccieemeritus » Mon Aug 20, 2018 9:34 pm

I live in California and use Scholarshare. My kids funds are 100% "Index U.S. Equity Portfolio". Total annual asset based fees is 0.08%. The passive age-based portfolios have total annual asset-based fees in the 0.11% - 0.17% range.

HEDGEFUNDIE
Posts: 1208
Joined: Sun Oct 22, 2017 2:06 pm

Re: CA resident 529

Post by HEDGEFUNDIE » Mon Aug 20, 2018 10:47 pm

ccieemeritus wrote:
Mon Aug 20, 2018 9:34 pm
I live in California and use Scholarshare. My kids funds are 100% "Index U.S. Equity Portfolio". Total annual asset based fees is 0.08%. The passive age-based portfolios have total annual asset-based fees in the 0.11% - 0.17% range.
+1.

As far as I can tell this is the cheapest 529 plan anywhere, cheaper than the Utah Vanguard funds.

mervinj7
Posts: 731
Joined: Thu Mar 27, 2014 3:10 pm

Re: CA resident 529

Post by mervinj7 » Mon Aug 20, 2018 11:50 pm

ccieemeritus wrote:
Mon Aug 20, 2018 9:34 pm
I live in California and use Scholarshare. My kids funds are 100% "Index U.S. Equity Portfolio". Total annual asset based fees is 0.08%. The passive age-based portfolios have total annual asset-based fees in the 0.11% - 0.17% range.
+1
This fund is the cheapest of any states' 529 equity options.

Drovor
Posts: 113
Joined: Sun Oct 25, 2015 9:50 am

Re: CA resident 529

Post by Drovor » Mon Aug 20, 2018 11:57 pm

ccieemeritus wrote:
Mon Aug 20, 2018 9:34 pm
I live in California and use Scholarshare. My kids funds are 100% "Index U.S. Equity Portfolio". Total annual asset based fees is 0.08%. The passive age-based portfolios have total annual asset-based fees in the 0.11% - 0.17% range.
We do the same although we don't have much in the 529.

duuuuuude
Posts: 38
Joined: Mon Dec 12, 2016 11:42 pm

Re: CA resident 529

Post by duuuuuude » Tue Aug 21, 2018 12:19 am

CA resident here with scholarshare as well. After looking at other states’ plans the total cost in fees was lowest.

Normally, the fee consists of the expense ratio + management fee from the state provider.

You have to dig a little deeper with the Tiaa-Cref fund to see The specific fund/ticker, as they assign names to them at face value.

Scholarshare also offers bonuses if you open an account around May 29ish....they offered like $50 the last few years....

jacoavlu
Posts: 620
Joined: Sun Jan 06, 2013 12:06 pm

Re: CA resident 529

Post by jacoavlu » Tue Aug 21, 2018 7:36 am

Another +1 for the California plan. Last I looked it had the lowest cost for equities index funds, US and International. Cheaper than the NV, UT plans that are usually quoted as best. I use the CA plan and don’t live there. And yes last year I opened 5 more accounts on 5/29 to get a $50 bonus per plan. Thanks CA taxpayers!

charis23
Posts: 32
Joined: Mon Jan 02, 2017 3:25 pm

Re: CA resident 529

Post by charis23 » Thu Nov 29, 2018 3:49 pm

If you're on the fence about opening a CA 529 for your kid or a nephew/niece/grandchild, a great time to open one would be between 12/5/18 and 12/7/18. You'll get a $50 Amazon gift card if you setup a $50 opening deposit and $25 automatic contributions. That's a 25% return over 6 months :shock:. I'm going to open one for my niece.

https://www.scholarshare529.com/buzz/ca ... 2018.shtml

mervinj7
Posts: 731
Joined: Thu Mar 27, 2014 3:10 pm

Re: CA resident 529

Post by mervinj7 » Thu Nov 29, 2018 4:16 pm

charis23 wrote:
Thu Nov 29, 2018 3:49 pm
If you're on the fence about opening a CA 529 for your kid or a nephew/niece/grandchild, a great time to open one would be between 12/5/18 and 12/7/18. You'll get a $50 Amazon gift card if you setup a $50 opening deposit and $25 automatic contributions. That's a 25% return over 6 months :shock:. I'm going to open one for my niece.

https://www.scholarshare529.com/buzz/ca ... 2018.shtml
Thanks for posting. Good to know about this bonus!

LinusP
Posts: 67
Joined: Fri May 18, 2018 10:29 am

Re: CA resident 529

Post by LinusP » Thu Nov 29, 2018 5:05 pm

charis23 wrote:
Thu Nov 29, 2018 3:49 pm
If you're on the fence about opening a CA 529 for your kid or a nephew/niece/grandchild, a great time to open one would be between 12/5/18 and 12/7/18. You'll get a $50 Amazon gift card if you setup a $50 opening deposit and $25 automatic contributions. That's a 25% return over 6 months :shock:. I'm going to open one for my niece.
I googled this some, and they've done a promotion like this for the last several years around this time. Last year it was a Target gift card, and in 2016 it was a matching contribution to the 529. I guess you could always open an account, put in your $350, get your $50 around mid-year, and then roll over the balance to wherever you keep your "real" 529 (in my case, Nevada) to be ready for the next promotion. Worth the trouble? I'm not so sure... :wink:

mervinj7
Posts: 731
Joined: Thu Mar 27, 2014 3:10 pm

Re: CA resident 529

Post by mervinj7 » Thu Nov 29, 2018 5:13 pm

LinusP wrote:
Thu Nov 29, 2018 5:05 pm
charis23 wrote:
Thu Nov 29, 2018 3:49 pm
If you're on the fence about opening a CA 529 for your kid or a nephew/niece/grandchild, a great time to open one would be between 12/5/18 and 12/7/18. You'll get a $50 Amazon gift card if you setup a $50 opening deposit and $25 automatic contributions. That's a 25% return over 6 months :shock:. I'm going to open one for my niece.
I googled this some, and they've done a promotion like this for the last several years around this time. Last year it was a Target gift card, and in 2016 it was a matching contribution to the 529. I guess you could always open an account, put in your $350, get your $50 around mid-year, and then roll over the balance to wherever you keep your "real" 529 (in my case, Nevada) to be ready for the next promotion. Worth the trouble? I'm not so sure... :wink:
I think CA is hoping that at least some folks will keep their assets in scholarshare and enjoy the lower fees (roughly half for the equity fund compared to Nevada 529's Total Market last I checked)...

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