Via LearnVest By Libby Kane ~
When it comes to saving for a child’s college education, many parents turn to 529 plans.
The state-run plans are income-blind and let parents save for their child’s education (and associated costs like materials, fees and books) tax and penalty-free. But the problem is that there are more than 80 to choose from.
Since they are run by state governments instead of at the federal level, 529s vary somewhat between individual states–investors aren’t required to invest in their own state plan, but most states offer incentives to do so in the form of large tax breaks.
According to the Associated Press, Morningstar ranked 64 plans (which manage 95% of assets held in 529 plans nationwide) based on the quality of the people guiding the plan’s investments, how state officials approach the plan, the total investment and administrative expenses charged and past performance.
According to that standard, the top ranked plans were (in alphabetical order):
- Alaska’s T. Rowe Price College Savings Plan
- Maryland College Investment Plan
- Nevada’s The Vanguard 529 Savings Plan
- Utah Educational Savings Plan
These are only the top four plans–see the rest of the rankings here.
LearnVest is the leading lifestyle and personal finance website for women.