Originally Posted by wanaberetiree
Happy New Year !
I am considering to open a 529 account and compared several options, such as Fido, VG and Schwab. And learned lots of nuances about those 529s. Also surprisedly it seems that the most cost efficient plan is by https://www.scholarshare.com
managed by TIAA CREF for California (where I live).
So wanted to ping this group for opinion to make sure that I did not miss anything.
Pls share your experiences with 529 plans and best recommendations
My initial 529 was CA-sponsored and managed by TIAA-CREF. At the time I expected to return to CA and figured if there were any state tax benefits, having this plan would help. Opened it in 2001
Regrettably, TIAA-CREF soon headed into an era of exceedingly poor institutional management and investment performance. Was so bad, CA replaced them as managers. I transferred the account to NY's Vanguard-managed plan.
Fees for the CA plan's passive funds compare favorably to the NY plan, but the individual fund options are more limited. Their managed fund fees are reasonable, if active management is your thing.
(have to click through the individual funds to see the fees. May be a table somewhere I couldn't find)
I've had the accounts at NY/VGD for over 10 years and the investment choices were initially "good enough" and have gotten more diverse. Performance is inline with what I expected for those investments.
The accounts were set up for each of the kids before they were a year old and aggressively funded for a few years (but not at the expense of 401K and other savings), and I haven't contributed anything since they were each about 4 years old.
Would I do it again? At the time, it seemed like the best way to lock up some money for their education, no matter what happened to my career. The tax-free growth and ability to spend those gains on education expenses is even more attractive now that my income is derived solely from investments. So, yes I would.
If I were shopping today I would look for a VGD or DFA managed program (irrespective of the state sponsor) that had a range of fund choices-small/large/intl/value, etc. and low fees.