10. Alabama: CollegeCounts 529 Fund | Tax deduction for Alabama residents | 0.25% program management fee | 0.27% - 0.88% total asset-based expense ratio | Funds from DFA, Fidelity, Pimco, T. Rowe Price, Vanguard (Photo: Shutterstock)
9. Nebraska: TD Ameritrade 529 College Savings Plan | Tax deduction for Nebraska residents | 0.25% management fee, 0.19% sub-administration fee and 0.03% fee paid to the state | 0.49% - 1.46% total asset-based expense ratio | Funds from DFA, Goldman Sachs, iShares, MetWest, State Street, T. Rowe Price, Tributary, Vanguard (Photo: Shutterstock)
8. New York: New York's 529 College Savings Program — Direct Plan | Tax deduction for New York state residents | 0.13% management fee, | 0.13% total asset-based expense ratio | All funds from Vanguard (Photo: Shutterstock)
7. Georgia: Path2College 529 Plan | Tax deduction for Georgia residents | 0.08% management fee, 0.06% state fee | 0.19% - 0.32% total asset-based expense ratio | Funds from DFA, TIAA-CREF and Vanguard (Photo: Shutterstock)
6. New Jersey: NJBEST 529 College Savings Plan | Contributor or beneficiary must be a New Jersey resident at time of enrollment | No tax deduction for residents | 0.10% management fee | 0.14% - 0.87% total asset-based expense ratio | Funds from Franklin Templeton (Photo: Shutterstock)

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5. Nebraska: Nebraska Education Savings Trust — Direct College Savings Plan | Tax deduction for Nebraska residents | 0.25% management fee for all but the Bank Savings option, which is 0.18%, 0.02% state fee | 0.20-1.26% total asset-based expense ratio | Funds from DFA, Goldman Sachs, iShares, Metwest, State Street, T. Rowe Price, Tributary, Vanguard
4. West Virginia: SMART529 WV Direct College Savings Plan | Account owner or designated beneficiary must have a West Virginia mailing address or be a West Virginia resident on active duty in the U.S. armed forces | Tax deduction for state residents | 0.08% management fee | 0.12% - 0.22% total asset-based expense ratio | Mutual funds from Vanguard plus a stable value fund from Invesco (Photo: Shutterstock)
3. Kansas: Learning Quest 529 Education Savings Program (Direct-sold) | Tax deduction for Kansas residents | 0.20% management fee (waived for cash and cash equivalents portfolio) | 0.09% - 0.81% total asset-based expense ratio | Funds from American Century, Baird and Vanguard (Photo: Shutterstock)
2. District of Columbia: DC College Savings Plan |Tax deduction for D.C. residents | $15 account maintenance fee ($10 for D.C. residents and 0 for accounts with a minimum $15,000 balance | 0.30% management fee (0.15% for Principal Protected Portfolio) | 0.31% - 0.74% total asset-based expense ratio | Funds from Ameritas Life, BlackRock, DFA, JPMorgan, Loomis Sayles, Schwab and Vanguard (Photo: Mike Scarcella/ALM)
1. Utah: my529 | Contributions up to $2,000 in 2019 per beneficiary by an individual and $4,000 by a married couple filing jointly are eligible for a 5% credit against Utah income tax, up to a maximum of $100 tax for single taxpayers and $200 per beneficiary for joint filers | 0.11% - 0.19% program management fee | 0.15 - 0.196% total asset-based expense ratio but customized static and aged-based options are 0.19 - 0.583% | Funds from DFA, Pimco and Vanguard plus FDIC-insured accounts held in trust by my529 at Sallie Mae Bank, U.S. Bank National and the Utah Public Treasurers' Investment Fund

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The 529 college savings plan is the single most popular college savings vehicle for families, accounting for about 30% of colleges savings and available in every state, except Wyoming, and Washington, D.C., according to Sallie Mae, a private lender of student loans.

But there are well more than 50 plans to choose from because many states offer plans that are sold directly to families as well as plans sold by brokers and registered investment advisors. In all cases, however, earnings grow free of federal taxes and withdrawals are tax-free if they’re used for qualified educational expenses such as tuition or room and board. In most cases, total allowable balances can reach into the hundreds of thousands of dollars.

The question for families then becomes which 529 plan to choose. Savingforcollege.com, a website devoted to that goal, recommends that families take into account these factors when doing so:

  • State tax benefits — are contributions to a 529 plan deductible from state taxes? Is that tax benefit limited to only state-based 529 plans or available also for contributions to out-of-state plans?
  • Plan fees, including any annual fees plus expense ratios for investment choices
  • Investment options, including the availability of target date and/or age-based funds that adjust allocations based on a beneficiary’s proximity to college enrollment and of funds with aggressive, moderate and conservative portfolios

Savingforcollege.com publishes a series of ratings for 529 funds, including performance rankings for plans within three categories: direct sold, advisor-sold (meaning broker-sold) and RIA-sold. The performance rankings reflect a composite score in seven asset allocation categories: 100%, 80%, 60%, 40% and 20% equity and 100% fixed income and 100% short-term compared to published investment returns.

Check out the slideshow above for the top 10 ranked 529 plans sold directly to investors, based on their one-year performance. Two of the plans — West Virginia and New York — placed in the top 10 category for three, five and 10 years and two plans — the Kansas and Nebraska Education Savings Trust plans — placed in the top 10 for five years also.

Note that direct-sold plans tend to have higher rankings than plans sold by brokers or RIAs due in large part to their lower fees. Unless otherwise noted, the plans included in the slideshow are available for out-of-state residents.

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