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March 19, 2007

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Thanks for posting this - I've been going crazy trying to cipher through the 529 plans for my (soon to be) young one. This will make it so much more tolerable to figure out where we should begin saving.

What about tax savings. I just moved to CT from NY. I noticed that CT just passed a law to make in-state 529s tax deductable. I haven't really looked into it but would it pay for me to change my 529 from NY to CT?

Something to keep in mind before you invest in a 529 is that some states offer a tax break on your contribution. For instance, take a look at the tax benefits for NY.

Joe --

I'm not sure if it's worth it to change or not. If I was in a similar situation, I'd check out Saving for College and see what they had to say.

Max --

Saving for College takes tax issues into account as they rate the different plans. See their site for how NY compares to all others.

I chose Ohio for my daughter's fund due to it's 4.5 rating for out of state, it's low fees and it's choice of Vanguard index funds. Since I live in Washington state I don't have a state income tax benefit and our state's education plan kind of stinks.

I think you have to question the motive of Moningstar here ... I can't see how/why they would recommend loaded funds in their top 5.

Below is from the Virginia plan. You get charged in several directions!
"Annual Fees: Investors pay a front-end load of up to 5.75%, which reduces as your assets increase. There is no management fee. Portfolio expense ratios range from 0.42% to 1.9%. There is a $10 maintenance fee. You'll also pay a one-time $10 enrollment fee."

Okay, no Management fee ... but 5.75% front-end load? You have to be kidding me. And the Colordado plan has a front-end load PLUS management fees PLU expense ratios!

Can we really TRUST every source for financial information? As always, I think it is better to do you own research and make your own decisions that suit you and your family right. I like to say ... you have to look out for numero uno.

Tim

I guess if you live in a state with a 5 Cap instate plan it makes sense to get that one.
I am in ohio and plan to get that set up soon for my step daughter.
any different thoughts?

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