What Is On Ohio 529 “Top Ten List” For Q4 2022
You want to make the smartest decision possible in all aspects of your life. When you start saving for your child’s education after high school with Ohio’s 529 Plan, CollegeAdvantage, you select which investment options you would like to invest your funds.
Ohio’s 529 Plan offers a diverse range of investment options from which to build your college-savings strategy. These 529 saving options include ready-made target enrollment portfolios, ready-made risk-based portfolios, individual investment options, and FDIC-insured banking options, all provided from our partners and leading investment managers — Vanguard, Dimensional Fund Advisors, and Fifth Third Bank. Ohio’s 529 Plan also offers tools and calculators to help you shape the college savings plan that right for your family’s needs.
If you are wondering in which investment options other account owners have selected to save for college, here’s our latest “Top Ten List.” These portfolios hold the largest balances of customers’ Direct Plan accounts, for the fourth quarter of 2022.
Please note that effective March 17, 2022, The Vanguard Age-Based Portfolios — Aggressive, Moderate, and Conservative — were converted to the Vanguard Ohio Target Enrollment Portfolio.
Top 10 investments options in the Ohio Direct 529 Plan
The top 10 investment options with the highest value of assets under management (fund balances in millions, as of December 31, 2022) are:
- Vanguard Ohio Target Enrollment Portfolio (ready-made age-based portfolio), $3,199.09
- Vanguard 500 Index Option (individual investment option), $1,010.07
- Advantage Age-Based Portfolio (ready-made age-based portfolio), $967.25
- Vanguard Aggressive Growth Index Portfolio (ready-made risk-based portfolio), $661.24
- Vanguard Growth Index Portfolio (ready-made risk-based portfolio), $323.05
- Vanguard Wellington Option (individual investment option), $295.92
- Vanguard Interest Accumulation Portfolio (individual investment option), $250.83
- Vanguard Extended Market Index Option (individual investment option), $250.42
- Fifth Third 529 Savings Account (bank account option) $216.33
- Vanguard Moderate Growth Index Portfolio (ready-made risk-based portfolio), $212.86
529 plans can be used for whatever education comes after high school, including federally accredited trade and specialty schools, apprenticeships, community colleges, certificate programs, four-year universities and colleges, graduate school, law school, and medical school. So, if your child chooses to further their education by attending a trade school, apprenticeship, or certificate program, you can use your 529 account to pay for these qualified higher education expenses.
Why save for college in Ohio’s 529 Plan?
There are many reasons why to save for your child’s future higher education in Ohio’s 529 Plan, especially the tax benefits.
First, earnings in a 529 plan are tax-free, so all investment growth is yours to cover college costs.
Second, 529 plan withdrawals to cover qualified higher education expenses are made tax-free for federally accredited programs. These expenditures include tuition; room and board (on and off campus); mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and classes; and certain expenses for a special-needs student. Qualified expenses for accredited apprenticeships — like fees, textbooks, supplies, and equipment like required trade tools — can be paid with 529 withdrawals. Also, student loan repayment is also a 529 qualified withdrawal. Any student loan that qualifies for the federal student loan income tax deduction can now be paid with a 529 distribution. There is a $10,000 lifetime limit per 529 beneficiary. However, an additional $10,000 can be used to repay qualified student loans for each of the beneficiary’s siblings. 529 accounts can also be used to pay K-12 tuition up to $10,000 per student, per year, for enrollment at public, private, or religious elementary or secondary schools. And starting in January 2024, any remaining in a 529 after the beneficiary has finished their higher education can be rolled over to a Roth IRA for the same beneficiary, provided certain requirements have been meet.
Third, Ohio residents who contribute to Ohio’s 529 Plan can deduct their contributions from their taxable state income. This deduction amount is $4,000 per year, per beneficiary, with unlimited carry forward, which means that the $4,000 is not a contribution cap. If an Ohio taxpayer contributes more than $4,000 in one year, they can continue to subtract $4,000 per year, per beneficiary, from their State of Ohio taxable income until all the 529 contributions are deducted.
Honors for Ohio’s 529 Plan
If you read financial websites, you will discover the high regard for Ohio’s 529 Plan. Financial industry organizations like Morningstar, Saving For College, CNBC, and Forbes have all rated Ohio’s 529 Plan as one of the best college savings programs in the nation. Here’s what they had to say.
Trusted financial industry investment research company Morningstar annually reviews the nation’s 529 college savings programs. Morningstar then ranks the 529 plans in a report released in November 2022.
Ohio’s 529 Plan is pleased to announce that the CollegeAdvantage Direct 529 Plan maintained its silver rating for the tenth year in a row. In addition, BlackRock CollegeAdvantage, Ohio’s Advisor 529 Plan retained its bronze ranking. This makes Ohio one of only three states that have both their Direct and Advisor 529 Plans ranked as medal-class college savings programs. The high ranking highlights the strength of and the industry’s regard for Ohio’s 529 Plan as one of the best in the nation.
Saving For College is an independent college-savings industry resource. Saving For College consistently recognizes Ohio’s Direct 529 Plan as one of the best plans in the nation for both Ohio residents and non-Ohio residents.
Ohio’s Direct 529 Plan is one of three plans in the nation to receive positive ratings from Morningstar in all four ranking pillars as well as earn the five-cap rating from Saving For College for residents and non-residents. Ohio’s Advisor BlackRock CollegeAdvantage 529 Plan is one of two plans to receive positive rankings in three Morningstar ranking pillars and earn five-cap rating from Saving For College for residents and four-and-a-half-star rating for non-residents.
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 is one of ten 529 college savings plans nationwide to earn a 5-Cap rating for both residents and non-residents, as of March 31, 2022. Ohio’s Direct 529 Saving Plan has received this recognition multiple times for the plan’s attractiveness for Ohioans and across the nation.
Ohio’s 529 Plan was recently named one of Military Saves Savings Champion for our continual support of this important program. Military Saves is part of the nonprofit Consumer Federation of America and is an initiative of America Saves. Military Saves works with government agencies, defense credit unions, military banks, and nonprofit organizations to promote savings and debt reduction.
Forbes Advisor ranks Ohio’s 529 Plan as one of the six best college savings programs in the nation. According to their explanation: “Ohio’s 529 Plan comes with features in line with the other plans on our list, including low fees, a range of investment options and a tax deduction for Ohio taxpayers. … The plan also comes with a minimum contribution, both to open the account and for each contribution thereafter. But it is small ($25) and likely manageable for many plan participants.”
CNBC also selected Ohio’s 529 Plan as one of the five best programs nationwide. As they wrote, “There isn’t much not to like about the CollegeAdvantage 529 plan — there’s a good mix of investment options (including FDIC-insured accounts), low fees and plans from top companies like Dimensional Fund Advisors. In fact, overall management fees are some of the lowest we’ve seen. Combined with low expense ratios, this makes this plan one of our top picks.”
Money Inc. ranks Ohio’s 529 Plan, CollegeAdvantage, second in its list of the top ten 529 programs nationwide. They highlighted the “tax break for Ohio residents, a diverse selection of investment alternatives, and low fees.”
For more than 33 years, Ohio’s 529 Plan, CollegeAdvantage, has been helping families across the nation save for their children’s higher education. Ohio’s 529 Plan covers qualified costs at any four-year college or university, two-year community college, trade or vocational school, apprenticeship approved by the U.S. Labor Department, or certificate program nationwide that accepts federal financial aid. Learn, plan, and start for as little as $25 today at CollegeAdvantage.com.
Posted on January 26, 2023