Even
though
529 savings plans
are offered in individual states, that doesn’t
mean you have to participate in your own state’s plan. Most states let
out-of-state residents open an account in the plan they sponsor.
This
flexibility is one major difference between 529 savings plans and
state
prepaid plans,
since many prepaid plans require that either you or the
beneficiary
reside in the state that offers the plan.
Investment options
Most
529 college savings plans offer age-based portfolios. In age-based
plans, the manager gradually reallocates your portfolio toward a more
conservative asset mix as your beneficiary nears college age. In most
529 savings plans, you can choose among 3 or more age-based tracks with
conservative, moderate, or aggressive
asset allocations.
Some
plans also offer fixed tracks, which means the asset allocation remains
the same over time. The plan manager chooses the investments in the
various tracks, which might be 100%
equity funds,
100%
bond funds,
or
some combination of equity and
fixed income.
In
addition, some plans allow you to customize your asset allocation by
putting together a portfolio of individual
mutual funds
or packages of
funds from among those offered by the plan.
For contact information, or to learn more about the features of a particular 529 plan, you can visit
www.collegesavings.org.
The investment research firm Morningstar also offers comparative tools online to help you find a plan that meets your needs:
www.morningstar.com
/529/529Table.html.
To
get the most up-to-date information about a plan, you can download the
Program Description and any supplementary materials from the plan’s Web
site.
