Tuesday, June 14, 2005

529 Plans

Atlast I shortlisted the plans that I should look for my son's 529 account based on the costs, residency requirements.. etc., I hate to pay annual/maintenance fees. So if a plan has those, then it is excluded. Also I prefer to go direct, rather than the advisor sold, so if plans need to be sold only thru' advisor, then they are also not in the list. Other than that, it is the residency requirements for enrolling and other similar factors contributed to shortening this list.

  1. California - TIAA
  2. Connecticut - TIAA
  3. Georgia - TIAA
  4. Idaho - TIAA
  5. Illinois - Citi/Salomon
  6. Iowa - Vanguard
  7. Kentucky - TIAA
  8. Michigan - TIAA
  9. Minnesota - TIAA
  10. Mississippi - TIAA
  11. Missouri - TIAA
  12. Nevada - Vanguard
  13. NewYork - Vanguard
  14. Oklahoma - TIAA
  15. Tennessee - TIAA
  16. Vermont - TIAA

I am a California resident, California allows qualified distributions from CA and other states' plans to be exempt from the CA state income tax. No deductions for contributions though.

Flexibility to change the beneficiary - it depends on the plan, but most of the plans that I have listed here, allows to be changed to a family member of the original beneficiary which includes cousins, in-laws, brother, sister.

I am thinking to choose a plan based on the investment options, their asset mgmt fees, penalty if there is in addition to the IRS charges. Also I want to look at the manager of the plan, also if possible underlying investment of that portfolio. Age limitations - does the beneficiary have to use up the funds before certain age? And how about rolling over the funds to another plan in the same state or another state's plan.

Hopefully I will finalize the plan within this week.

posted by Valli @ 11:22 AM

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