Best 529 plan to invest in

April 16, 2018 9:36 AM

I reside in California and am looking for a 529 plan to invest in for my offspring. I found this previously posted Ask, but the question is more than 10 years old now. I would love updated suggestions, and I would also love information and guidance on the specifics of what makes one plan any better than another. This is all new to me. Thanks in advance!
posted by choochoo to Work & Money (7 answers total)

Best answer: In California, there's no tax break for investing in a 529, so you are free to choose any one available without worrying about maximizing tax benefits. If you scout around, you'll see the same ones at the top of most lists, like this one from Morningstar. I have Utah plans for all my kids, and I've been very happy with them. (We live in Texas, another state with no tax breaks for 529s.)
posted by Pater Aletheias at 10:00 AM on April 16, 2018

Best answer: Pater Alethias has it. Since there's no compelling reason to use California's plan, pick one of the best. The states setting up these plans are highly competitive, so there's plenty of good options. Find a target date fund with low expenses (~.25% or less), set up the automatic contributions, and forget about it.
posted by wnissen at 11:10 AM on April 16, 2018

Best answer: We live in Illinois, where you get a big tax advantage for using their own fund. But our regular old investments are with Vanguard, which has a gold rating on Pater Aletheias's Morningstar list. They are super-easy to use, reliably have the lowest rates, and have nice passive funds that do the balancing/thinking for you.
posted by AgentRocket at 11:13 AM on April 16, 2018

Best answer: One of our friends here in California discussed this issue with an accountant approximately four years ago, and was also told to go with Utah. We followed suit.
posted by JenMarie at 11:19 AM on April 16, 2018

Best answer: I live in California and use New York's 529 plan.
posted by kirkaracha at 3:17 PM on April 16, 2018

Best answer: As a Californian I recommended the Utah 529 back in 2006 and am still in it and it has served me pretty well. They just rebranded to "My529".

Vanguard now directly markets their own 529 plan, tied to Nevada. If I were setting up a new plan today I'd look into whether that was cheaper than Utah and/or had better fund investment options.
posted by Nelson at 3:51 PM on April 16, 2018

Response by poster: Thank you, everyone, for all your helpful answers! I wasn't sure which site's recommendations to trust, but it looks like there's a consensus among you. I am probably going to go with either the Vanguard or the Utah plan.
posted by choochoo at 6:27 PM on April 16, 2018