Ohio’s 529 Plan Ranks Nationally For Long-Term Performance
Whether you’re saving for your child’s higher education in a 529 plan or saving for your own retirement, you know how important long-term investment performance is to the growth of the account.
Savingforcollege.com, a trusted college-savings industry resource, provides research on 529 plans, financial aid, scholarships, and tools to estimate college expenses. Savingforcollege.com also analyzes the performance of the nation’s 529 plans on a quarterly basis and ranks them based on that performance. Ohio’s 529 Plan, CollegeAdvantage, consistently receives high ranks for its long-term investment performance.*
Ohio’s 529 Plan rankings
As of June 30, 2018, CollegeAdvantage Direct 529 Plan ranked second in the nation for the best performance in five-year category. Ohio’s 529 Plan was also ranked fifth nationwide for the best performance in the three-year category.**
Savingforcollege.com determines a 529 plan’s performance score by comparing seven similar asset-allocation categories between all the nation’s 529 plans, the historical performance of each selected portfolio category, and then averaging the score of all the groupings.
Savingforcollege.com also recognizes Ohio’s Direct 529 Plan as one of the best plans in the nation for both Ohio residents and non-Ohio residents. The FDIC insured options in Ohio’s 529 are also recognized as a top option for conservative investors. Ohio’s 529 Plan is proud to receive all these high marks as we strive to offer the best 529 plan possible for all forward-thinking parents who want to save for their children’s future college costs.
Savingforcollege.com offers a 5-Cap Ranking system. This designation is dependent on criteria that shows the college savings plan “offers outstanding flexibility, attractive investment, and additional economic benefits (such as generous state tax incentives) that for some people, at least, will provide a substantial boost to their savings. There are few, if any, weaknesses noted in the program.”
Ohio’s 529 Plan, CollegeAdvantage, is only one of only four 529 college savings plan nationwide to earn a 5-Cap rating for both residents and non-residents. Ohio’s Direct 529 Saving Plan has received this recognition multiple times for the plan’s attractiveness for Ohioans as well as out-of-state residents.
Savingforcollege.com uses these five criteria:
- Performance, which is taken directly from Savingforcollege.com’s quarterly performance rankings;
- Costs of running a college-savings plan, which includes expense ratios, administrator and managerial fees;
- Features such as a spectrum of age-based and risk-based portfolios as well as FDIC-insured options, participation in programs like Upromise and Ugift, and contribution restrictions;
- Reliability signals such as plan disclosure statements, the ease of making account changes, and the quality and experience of outside program managers; and
- Added upgrades for residents of plan’s sponsoring state.
Ohio’s 529 Plan tax advantages
CollegeAdvantage, Ohio’s 529 Savings Program, helps families across the nation save money for their children’s future college, vocational, trade, or technical school costs with tax-advantaged benefits.
First, all contributions and earnings grow tax-free in a 529 plan, so all investment growth is yours to use to cover college costs. Second, a 529 withdrawal is tax free when used to pay qualified higher education expenses — those costs that are mandatory to attend the school. Third, a CollegeAdvantage account owner who is an Ohio resident can deduct their 529 contributions from their Ohio taxable income. The deduction is now $4,000 per year, per beneficiary, with unlimited carry forward. This means that $4,000 per year is not a contribution cap. If an Ohio taxpayer contributes $12,000 in one tax year, they will continue to subtract $4,000 per year, per beneficiary, from their State of Ohio taxable income until all the 529 contributions have been deducted.
Tools and calculators
Ohio 529 Plan has calculators and tools for you to shape the 529 plan to best fit your family’s needs. Would you like to receive an estimate on your child’s projected college costs and what monthly 529 plan contribution can help you reach a saving goal? Then add the requested information to the college savings planner for an estimation. The cost of waiting tool can approximate how much more money you will need to be set aside if you postpone saving for higher education costs. The tax benefit tool illustrates the long-term advantages of tax-free growth in a 529 plan compared to a taxable savings account. If you aren’t sure how much risk-taking you are comfortable, answer the risk tolerance questionnaire to discover your tolerance for risk to determine an investment strategy best suited to you.
You can review your savings strategy based on your child’s life stage with CollegeAdvantage. If your child started kindergarten, you have more time to benefit from the power of compound interest. If your child is in middle or high school, you may want to accelerate your savings. Even if your child is in college, you can still take advantage of tax-free earnings (which helps you save even more) and you can maximize the Ohio tax deduction, too.
Ohio’s 529 Plan can be used nationwide
Saving for college in Ohio’s 529 plan does not mean that those funds can only be used in Ohio. 529 plans can be used nationwide at any accredited two-year, four-year, graduate or professional, or any other post-secondary schools that accepts federal financial aid.
Today’s a great day to open an Ohio 529 Plan to save for your child’s future training and education. An investment in a 529 plan is an investment in your child. Remember, every dollar saved today is a dollar that doesn’t have to be borrowed which makes Ohio’s 529 college savings plan an excellent alternative to student loan debt. Ohio’s 529 Plan, CollegeAdvantage, is your plan, your way.
*The performance data shown represents past performance, which is not a guarantee of future results.
**Due to a portfolio alignment change by Savingforcollege.com, one of the CollegeAdvantage Direct 529 Plan portfolios is not currently included in 10-year performance investments. This change moved Ohio’s 529 Plan to the “N/A” category at the 10-year level. Prior to this change, 10-year performance ranking for Ohio’s 529 Plan was second in the nation as of the second quarter in 2017.
Posted on September 06, 2018