Tips for maximizing the returns on 529 plans.
Since they were created in the ‘90s, tax-advantaged 529 savings plans—state-sponsored accounts named after the IRS code that created them—have been among the most popular investment vehicles for families saving for college.
But during the Great Recession the typical 529 plan for 7-to-12-year-olds lost about 28% of its value, according to the investment research firm Morningstar. Many 529 plans were revealed to have fatal flaws, such as poor management and expensive overhead.
Many of these plans, however, bounced back with economic recovery, and now feature lower fees and more investment options. The average fee for 529 funds dropped from 0.84% to 0.72% over the past three years, making them attractive again for families.
Here are some strategies to ensure you make the most of your 529 plan investments:
According to Morningstar, the states with the best overall 529 plans are Utah, Maryland, West Virginia, and California.
To learn more about 529 plans, contact Sun Lifetime Financial Advisors.
Copyright 2014 Credit Union National Association Inc. Information subject to change without notice. All other rights reserved.Neither the publisher nor the author of this article is a registered investment adviser. Readers should seek independent professional advice before making investment decisions.
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