Which Is The Best 529 College Savings Plan?

529 college plans are state plans and all of them have differences in their features. Another important thing is that the 529 state plans are open to all citizens and resident aliens of the US. That is the reason people start comparing 529 plans at a statewide level. So which is the best 529 college savings plan, eventually?

It is very difficult to choose one best plan out of the various 529 college savings plan for the simple reason that there are too many factors to be taken into account. There may be some good and some bad features with all the plans, and making the choice could become very tough. At the same time, you have to remember that these plans are all long term plans. The scenario might change when your child grows old enough to attend college.

On the other hand, we could go as far as to say that all 529 plans are good. They do give you a good tax deferment and allows your assets to build free of federal taxes. They provide enough money, adjusted for inflation, to pay for your children's college education bills and other expenses when they come of age. They are transferable from one relative to another. As such, 529 college plans become better than other plans for college investment.

Now, choosing for the best 529 college plans can be done on three grounds:

1. Opt for your local state plan. You will get more advantages that way, due to your state resident status. However, you must think for the whole term of the plan too. Many state plans will have low costs at the start and tax advantages too, but they could be costlier in the long run. If that is the case, then you must choose an out of state plan, after weighing some options.

2. Look out for the annual costs. Typically, the yearly costs on a 529 plan should be 1% or lower on the total cost of the plan.

3. Look for the tax breaks and commission advice. With 529 plans, the plan advisors themselves will do most of the thinking for you. They will let you know where you can save through the cost. In other investment options, you find these savings yourself, or you get a financial advisor to do it for you. There might be a slipup in such cases. Check whether your 529 plan manages the decisions themselves.

Here are some of the best 529 college savings plans can you can choose from:

1. The TIAA-CREF plans are good because of their low costs. Even among them, the best ones are those from California, Connecticut, Georgia, Idaho, Kentucky, Michigan, Minnesota, Missouri, New York, Oklahoma, Tennessee and Vermont.

2. Pennsylvania is a very good option if the child wants to study out of state. This was also the first plan to include a tax deduction in income tax for people who wished to pursue a college education in some other state.

3. Plans of New Mexico, South Carolina and West Virginia have good benefits for their own state residents, but no additional features for out of state residents. Residents of these states should not look at other state's plans, as their own plans will give them the best benefits.