Choosing College saving plans is one of the toughest decisions that parents have to make for the bright future of their children. Knowing where to go is necessary before you dive into the world of a savings plan.
What is a 529 Plan?
These are plans that offer parents or guardians an opportunity to save up for the future education of their children. The 529 section of the law offers tax-free saving plans for college funds.
These plans are termed as qualified tuition plans. The plans are partly sponsored by state, agencies, educational platforms and other educational initiatives. They are legally authorized by law under the internal revenue code.
There are two kinds of 529 plans that you can opt for, these are either “direct sold plans” or “sold by advisors.” The prepaid plans are offered by 18 states in the U.S, these lock in present tuition charges and are offered exclusively by certain universities. While you can choose between 529 plans or set up a fund of your own, there will always be a difference in the tax deductions. Moreover, the Myths attached to 529 plans may prompt you to choose other plans. This is why doing your homework prior to investing is necessary.
Top 10 529 Plans
- The New York plan: This is the College savings plan endorsed by the city of New York. This program is a direct plan with a performance score of 33.97. It is available to U.S citizens and other residents including minors. It is also available for UGMA and UTMA custodians or legal entities. This program is managed by Ascensus College.
- Nevada: This savings plan is a USAA 529 savings plan for college that is endorsed by the state of Nevada. The performance score of this qualified savings plan is 33.92. It is available to aliens including minors, the citizens of the U.S.A and holders of UGMA and UTMA. This is also available for trusts and is managed by Ascensus College Savings.
- Wisconsin: This Edvest savings plan is endorsed by the state of Wisconsin. The performance score for this savings plan is 32.32. The residents of legal age and the citizens of the U.S.A are eligible to utilize this qualified savings plan. It is also available to other legal entities and holders of UGMA/UTMA. This program is managed by TIAA-CREF Tuition Financing, Inc.
- Maine: This Next generation College savings plan is endorsed by Maine. Its performance score is 32.30and can be utilized by citizens of U.S as well as aliens who are at the legal age of 18 and above. It is also available for custodians of UGMA and UTMA as well as other legal entities. Merrill Lynch, Pierce Fenner and Smith are managing this plan.
- Nevada Vanguard Plan: This plan is sponsored by Nevada under The Vanguard 529 savings plan. The performance score for this is 32.00 and is available t citizens, aliens above 18 years. It can also be utilized by legal entities as well as holders of UGMA/UTMA. It is managed by Ascensus Broker Dealer Services, Inc.
- Alaska: The performance score for this plan is 30.29 and it is available to U.S citizens who are of legal age as well as UGMA/UTMA holders. Legal entities that are formed in the U.S can also make use of this. It is managed by T.Rowe Price associations.
- West Virginia: The performance score for this is 27.70 and it is available to U.S citizens, aliens of legal age, UGMA/UTMA holders and other legal entities. It is managed by Hartford Life insurance Company.
- California: The performance score for this plan is 21.61; it is available for U.S citizen’s aliens of legal age and holders of UGMA/UTMA. It is managed by TIAA-CREF tuition financing Inc.
- Ohio: The performance score for this plan is 21.40 and is available to U.S citizens, aliens, legal entities, trusts and custodians of UTMA/UGMA. It is managed by Ohio tuition trust authority.
- Michigan: This program is endorsed by the state of Michigan. The performance score of this qualified plan is 33.07 and it is available to U.S citizens, holders of UGMA/UTMA, trusts, other organizations such as 501 © (3), government agencies both state and local and legal entities as well. This program is managed by TIAA-CREF tuition Financing Inc.