We only considered plans consumers in any state can access. Plan highlight Low fees. Learn More. Why We Picked It. Fund College Investing Plan Massachusetts. In-state tax benefit None. Plan highlight High contribution limit. Plan highlight Generous tax benefit.
Plan highlight Generous tax benefit for single filers. Oregon College Savings Plan. Plan highlight Matching scholarship program available. Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances.
We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results. Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available.
There are no annual contribution limits for plans, other than gift tax considerations. Some of the most important criteria for choosing a plan include:. These criteria for selecting the best plan may lead to tradeoffs, where a superior rating along one dimension may correspond to an inferior rating along another dimension.
For example, there is a tradeoff between return on investment and fees. The plans with the best return on investment may not necessarily have the lowest fees, or vice versa, so one has to evaluate the net return on investment after subtracting the fees. The net return on investment can vary depending on the investment time horizon, since a longer investment time horizon is necessary for a lower annual expense ratio to cover the cost of the sales load.
The benefits of a plan may differ for in-state and out-of-state investors in the plan. For example, there may be a tradeoff between lower fees in an out-of-state plan and a state income tax break for an in-state plan.
The tradeoff may vary depending on the number of years until the student enrolls in college, reaching an inflection point around the time the student starts high school. Some plans may provide seed contributions, matching contributions and lower fees for state residents. The program has no yearly maintenance fee, and there is no minimum initial contribution to get started.
Lots of investments choices, including an FDIC-backed savings account that may be appealing for children who are closer to college age. Age-based configurations charge between 0. There is no enrollment fee when you open an account and no annual maintenance fee that will eat into your balance.
The underlying funds include selections from giants such as Vanguard and Templeton, as well as some lesser-known companies such as Rothschild Asset Management and Stone Harbor Investment Partners. You can select from one of three age-based options, or you can design your own portfolio based on a mix of funds that meet your investment goals and risk tolerance. A plan is a state-sponsored savings plan that allows parents to invest funds that you or a separate beneficiary can withdraw tax free for qualified educational expenses.
Several states also offer prepaid tuition plans, which allow parents to purchase credits that cover the cost of tuition when their son or daughter eventually heads to college. In contrast to traditional accounts, prepaid plans are typically only valid for in-state tuition at public universities. Depending on where you invest, the state may allow you to transfer the contract to a school in another part of the country or a private institution, but you may not get the full value of your contract back in the process.
You can buy college savings plans in one of two ways: by selecting a direct-sold plan on your own or opening an account through a financial advisor. To open a account yourself, simply visit the website for your preferred plan and start the enrollment.
When used for qualified expenses—a category that includes tuition, certain room-and-board fees, required textbooks, and computers—students can withdraw money from a plan tax free.
In addition, some states offer income tax deductions for residents who contribute to their plan. If your son or daughter ends up not going to college—or is fortunate enough to get a large scholarship—you can transfer the account to another child or save it for a grandchild. You can also use the money to fund your own education, should you decide to go back to school. Yes, sort of.
At any given time you can only have one beneficiary for each account. That means you can only take distributions for that child. However, if you have more than one child and only want to set up one account, you can always change the beneficiary to a qualified family member at a later date. Any unused balance could then be withdrawn by the new presumably younger sibling for eligible education expenses.
Alternatively, you can set up a separate account for each child. If you end up with an unused balance in any of the accounts, you can switch the beneficiary to another child or grandchild—or use it for your own education expenses. With the exception of Wyoming, every state and the District of Columbia operates at least one savings plan. Here is a list of direct-sold plans by state, along with the annual expense ratio that they charge account holders.
In-State or Out-of-State? Advisor or Direct-Sold Plans. Financial Aid. Investment Strategy. Final Thoughts. By Abby Chao. Reviewed by Samantha Silberstein. Article Reviewed April 22, She spends her days working with hundreds of employees from non-profit and higher education organizations on their personal financial plans.
Learn about our Financial Review Board. Prepaid Tuition Plans Best for in-state, public colleges, and universities Can only be applied to tuition and fees Little growth potential. College Savings Plans Can be used for in-state and out-of-state public and private schools Can be applied to many qualified educational expenses Offer tax advantages and growth potential.
Article Sources. Your Privacy Rights. To change or withdraw your consent choices for TheBalance. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data.
We and our partners process data to: Actively scan device characteristics for identification.
0コメント