Though picking a 529 is a little different from picking a mutual fund for a retirement account, it’s not as difficult as it first seems. The trickiest questions involve special benefits for state residents. You therefore don’t have to closely examine plans from all 50 states, just one or two: the states where the contributor and student live.
Once you’ve assessed those exclusive benefits, you can weigh those states’ plans against the best offered by other states. Most plans do not require that either the student or account owner be residents. Savingforcollege.com has a list of plans with the lowest fees, as well as a list of plans with the best investment performance.
Morningstar Inc. (Stock Quote: MORN), the investment-information firm, produces an annual list of the best and worst 529s based on factors like performance, risk and fees. The latest list says the best are found in Ohio, Indiana, Utah and Virginia.
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