which 529 state plan to use?

diehards:

i stripped out all names from below email responses on the 529 email. thanks for the input! very solid info given...

also, i started a poll on the board... seems most folks like their own state, and then nevada: http://www.diehards.org/forum/viewtopic.php?t=8556

happy thanksgiving!

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original email request:

mn diehards:
peer pressure from the mn diehards has us thinking that it's finally time to open a 529. about 3/4 of the group last time said they have a 529, but i didn't ask through which state. i want to tap into your experiences. i'm thinking utah's plan http://www.uesp.org/ (low fees, vanguard funds, seems to be near the top of most lists i've seen)
if you have an account, what state do you do it though? any reason to go w/ minnesota's plan? or some other state's plan? anything you would do different w/ your 529s in retrospect? thanks for any and all advice.

and the responses:
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I am using the Minnesota College Saving Plan http://www.mnsaves.org/ The distributions are free from federal and MN taxes. The contributions are not tax deductible; however, if the family income is less than $80,000, the State matches the contributions by a percentage in a matching account. The expenses are low and there are several plan options, including one where investments vary by the age of the child. A number of years ago I purchased EE Savings Bonds in my name with the intent of using them for my daughters' college expenses. However, my income became too high to benefit from the federal tax benefit. I did learn that you can roll over EE Savings Bonds into a 529, which I did, without incurring a tax liability for the accrued interest. With one daughter having recently finished college and my second one just starting as a freshman, my only advice is the usual--save as much as you can as early as you can! Good luck.
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Hi
About a year ago I set up 529's for the grandkids. I researched the diehards site and went with Ohio. Vanguard and low fees. There was a specific reason I thought Ohio was better than Utah but I don't remember what it was.
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I opened a 529 for my granddaughter this year. I strongly considered the Utah plan ( plus a couple of other as I remember) but finally went with Minnesota's plan with TIAA CREF, with the 100% equity option. There was not tremendous rationale, TIAA CREF is a pretty good company. I can always change plans if, for instance, down the road I would be interested in specific options.
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We are sustaining two 529 plans for two grandsons. Both are Vanguard Iowa. There is a deduct from the State of Iowa income tax. It is not a big deal but every penny counts when you are a Diehard. =================
I have a 529 for my 5 grandkids with the MN plan. I am trying to remember why I went that way. Your email has prompted me to look at it again. So yes, in retrospect, I think Utah is the way to go. Will have to see if I can switch. I have had this plan for about a year now. Would be interested in hearing what kind of comments you get concerning this subject.
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I have used the MN plan for all 4 of my children. You do get a matching grant from the State depending upon income level. So the matching grant is sort of a refund of one's taxes that helps with the tuition etc.
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I will be making the same decision on a 529 plan for my newborn son. I was thinking Utah, Ohio or Iowa but I'm still researching. I would like to hear the responses you get from the group on your question. Please share what you can. Have a great day!
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I was actually thinking the same thing - not the Utah plan, but the 529 for my sister's kids and maybe for mine someday, (do not have any yet or planning to-but you never know) Anyways, isn't it ironic that these thoughts come up when a new year is approaching. (But these thoughts are so important! with time on our side) So- if you don't mind - let me know what the other guys are using, I'll look up Utah and some others and get back to you.
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I have a 529 for my Grandson. Vanguard, Nevada. At the time I started it there were fewer programs offered by Vanguard than now. I choose Vanguard Moderate Growth, which is about 25% bonds. I have not changed it. The funds will have 5 years. That is I put in the max each year for 3 years (His Freshman year is already taken care of.) He will have 1/3 of the funds for each of the last 3 years of college. I feel his parents can contribute for those last 3 years and he can also work (and borrow). I don't think it is wise to GIVE everything to kids on a silver platter.

His brother is a special needs child and I hope to set up some sort of "Trust" for him that will not hinder his getting help from the various agencies that help special needs. That is a whole different ball game and if I ever figure it out, I would be willing to share my findings if there is interest. I believe I will be using an attorney for this.
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We opened up a MN 529 account last year because of the matching grants they offer to MN residents--which in my mind more than makes up for a slight difference in fees and non-Vanguard fund options. Last year, the match was 15% of deposits for households making up to $50,000 and 5% for those making over that. This year, they upped it to 15/10. TIAA-CREF offers the investment options, so they're more than reasonable.
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We have 529 with MN, through TIAA -CREF, they do OK job, exp. 0.65, I chose an option when they adjust investment choices automatically based on the age of the child. In our case we are 4 years away, so conservative, with not very exciting rate of return. If I would go back and do it again - Utah or Iowa plans. Take a look here
http://collegesavingsiowa.uii.upromise.com/content/details/planDetails.html
- through Vanguard, also you can use Upromise system, when ? 2% or so of certain credit cards used amount goes into the account - I do not know details.

Good luck, and here is MY philosophy of successful higher education: make sure your kids know both fun and discipline from early childhood-> push them to be straight "A" students starting with elementary school(bribe with interesting stuff...eventually they get used to the idea) -> get merit scholarship to the in state school for undergrad-> choose the best school you can get into for graduate program, and the kid pays for it him/herself, but maybe you can help too with leftover 529 money that was not used for undergrad school...certainly sounds much easier on paper than in real life ;-)
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Great idea . . . Information on 529 Plans is a good topic for discussion, insight, etc. I have not opened any yet, but with a first grandchild on the way in a month, I suspect a 529 is not too far in my future.
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