Twice a week, our CEO and resident money guru Jean Chatzky tackles your burning questions in the HerMoney newsletter. We’ve pulled some of the best to feature on our website — and this one made the cut! Got a question for Jean? Send it her way right here.
Q: Today’s question comes from a member of the private HerMoney Facebook group. She asks: “How do I find the best 529 plan? I know you can open one anywhere.”
A: You’re right, 529 plans can be opened in any state, even if it’s not the one you reside in. Plans vary though, so you’ll want to pay attention to a few important factors as you help your child save for college, including:
● State tax benefits: Some states (including those listed here) offer state income tax credits or deductions. This is one of the big reasons why many people will stick with a 529 plan in their own state.
● Fees and other expenses: As you compare plans, keep an eye out for fees and expenses, like program management fees, investment-related expenses and account maintenance fees.
● Investment options: Different plans will offer varying types of investment options. For example, target-date funds, which automatically become more conservative as your child approaches college age, are popular.
There are other factors to keep an eye out for, too. For example, is the plan’s website easy to use? Does the plan allow for automatic contributions? Do a thorough comparison, and you’ll be sure to find a plan that works for you and your family.
MORE ON HERMONEY:
- Ask Jean: “Should I Buy Used Luxury Items?”
- Ask Jean: “What’s A CD Ladder?”
- Ask Jean: “How Much Should I Spend On A Birthday Party For My Daughter?”
SUBSCRIBE: We’re changing our relationships with money, one woman at a time. Subscribe to HerMoney today.
