The Best 529 College Savings Plan

Kiplinger's Personal Finance magazine came out with a multi-page spread in the November issue called "The Best List" (sorry, no link for now, though I'm sure they'll put it on the web eventually) and I'll be highlighting and commenting on several of their thoughts over the next week or so. Today, we're kicking off the series with what Kiplinger's calls the best 529 College Savings Plan:

The Best 529 College Savings Plan: College Savings Iowa

If you get a state-tax deduction for your contribution, stick with your own state's 529 plan. If not, choose College Savings Iowa. Iowa's low-cost plan offers 13 investment options from Vanguard, including portfolios that become more conservative as your child gets closer to college.

Wow, there's lots to love here (especially for someone like me who's looking at actively saving for college). A few reasons this seems like a great plan:

1. Low costs. And, as we know, low costs often lead to high investment returns.

2. Vanguard. Love 'em.

3. Iowa. I grew up there and my parents still live in the Hawkeye state. ;-)

For more great tips on saving/paying for college, see Best of Free Money Finance: College and Education Posts.

Comments

[Tim Struck]

I can't see how the Iowa plan is better than the New York Direct plan (which I have). Both offer Vanguard funds. It looks like Iowa offers more fund options but sometimes more options isn't always better. New York's plan has slightly lower Managment Fees (0.55% vs. 0.62%) which is important to me. I don't live in New York anymore but have not found a good reason to move my plan to my current state (Minnesota) or any other state because I feel the New York plan is great. I also like their website for those who do everything online. The New York plan also allows you to link your UPromise savings ... I don't think all plans offer this.

Tim

[FMF]

Tim --

Looking at savingforcollege.com, they have the NY and Iowa plans rated the same (4 1/2 stars) for in-state savers and Iowa a bit better (4 stars to 3 1/2 stars) for out-of-state savers. You'll need to dig a bit deeper to find out why -- I'm sure they cover it, I just couldn't find it tonight.

[TJP]

I opened a Upromise account to take advantage of my upromise account balance. They also offer Vanguard investment funds which have some of the lowest costs in the biz. I really like what they have to offer.