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Ohio 529 Plan Tops The Performance Charts

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Ohio 529 Plan Tops The College Savings Performance Charts

Whether saving for your emergency fund, your retirement, or your child’s higher education, positive long-term investment performance is a critical component to keep those funds growing.  When coupled with the power of compound interest, long-term investment performance keeps your account strong.

Here’s some great news for you. Ohio’s 529 Plan has topped the long-term performance charts for Savingforcollege.com, a trusted college-savings industry resource. Savingforcollege.com provides unbiased research on 529 plans, financial aid, scholarships, and offers tools to help families estimate college expenses. Savingforcollege.com analyzes the performance of the nation’s 529 plans on a quarterly basis and ranks them. Ohio’s 529 Plan, CollegeAdvantage, has consistently received high marks for its long-term investment performance.

Ohio’s 529 Plan rankings

As of March 31, 2019, CollegeAdvantage Direct 529 Plan now ranks first in the nation for the best performance in both the five-year category and the ten-year category. Ohio’s 529 Plan was also ranked fifth nationwide for the best performance in the one-year and three-year categories.

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 consistently recognizes Ohio’s Direct 529 Plan as one of the best plans in the nation for both Ohio residents and non-Ohio residents.

After learning of the newest Savingforcollege.com investment performance rankings, Ohio’s 529 plan Executive Director Tim Gorrell said, “We endeavor to be the best in class higher education savings and investment options. These rankings illustrate the trust and confidence investors can have in our plan. We are ever mindful of our duty to provide and facilitate the most favorable conditions for our account holders so they can reach their higher education goals and aspirations.”

5-Cap Rankings

Savingforcollege.com uses a 5-Cap Ranking to the nation’s college savings programs. A 5-Cap 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 Direct 529 Plan, CollegeAdvantage, is only one of only two 529 college savings plans nationwide to earn a 5-Cap rating for both residents and non-residents, as of April 18, 2019. 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:

  1. Performance, which is taken directly from Savingforcollege.com’s quarterly performance rankings;
  2. Costs of running a college-savings plan, which includes average asset-based expense ratios, administrator and managerial fees;
  3. 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;
  4. Reliability signals such as plan disclosure statements, the ease of making account changes, and the quality and experience of outside program managers; and
  5. Added upgrades for residents of plan’s sponsoring state.

Ohio’s 529 Plan tax advantages

Why save in Ohio’s 529 Plan? CollegeAdvantage 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 federally accredited school or program. 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.

Not Just For Four-Year Programs

529 plans can be used for whatever comes after high school, as higher education takes many forms. This list includes not just four-year universities and colleges, but also community colleges, trade and specialty schools, certificate programs, graduate school, law school, and med school.

Simply put, you can use the funds in your Ohio 529 Plan almost anywhere you are comfortable sending your child and your money. 529 plans can be used at any federally accredited educational institution, which is a post-secondary school that accepts federally financial aid. If you want to confirm that the schools your child is interested in attending — whether four-year, two-year, graduate, or vocational — accepts federal aid, then do a search to see if the institutions have a Federal School Code on the Free Application for Federal Student Aid (FAFSA). If the schools do, then you can use your 529 funds there.

Use Ohio’s 529 Plan Nationwide

While you may have saved in Ohio’s 529 Plan, you can use your funds at both Ohio schools and schools nationwide. 529 plans can be used across the United States at any accredited post-secondary school that accepts federal financial aid.

Tools and calculators

Ohio’s 529 Plan has calculators and tools 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 use the college savings planner. The cost of waiting tool can approximate how much more money will need to be saved if you get a late start on saving for higher education costs. The tax benefit tool shows the long-term advantages of tax-free growth in a 529 plan compared to a taxable savings account. Answer the risk tolerance questionnaire to determine an investment strategy best suited to your comfort level with risk.

Visit Ohio’s 529 Plan, CollegeAdvantage, online to start saving today for your child’s future education. An investment in a 529 plan is an investment in your child where every dollar saved today is a dollar that doesn’t have to be borrowed later. For someday your child is going to college. Someday starts today with Ohio’s 529 Plan.



Posted on June 27, 2019

Ohio Tuition Trust Authority

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