529 Question

[kanga1]

Does it really matter where you open a 529 for your child? I'm in Minnesota but the Minnesota plan doesn't appear to have the best reviews. Then I realized I could just open one through Fidelity where I already have a brokerage account. Just seems like everyone opens one through a state plan, I don't really hear of anyone using Fidelity, Vanguard, etc. 

[Susie]

I use my state (NY)'s 529 plan for the state income tax deduction.  Not all states offer a state income tax deduction; if yours doesn't, and the plan isn't particularly well reviewed, then there's no real reason to use your state's 529 plan.  

[flygirl]

I’m in MN and I believe ours is in Idahos plan but I’d have to look. There is no incentive in MN to use their plan.

[tcu2003]

I’m in KS and use the NY plan. My state’s tax incentive doesn’t make you use the KS plan, so I don’t.

[carmenere]

My H did a ton of research when we set up 529s for our niece and nephew, and some state plans have much better reviews than others. A few states offer incentives for residents to use their plans. We're in GA but chose the NY plan.

[archiethedragon]

Dec 27, 2021 16:20:08 GMT -5 kanga1 said:

Does it really matter where you open a 529 for your child? I'm in Minnesota but the Minnesota plan doesn't appear to have the best reviews. Then I realized I could just open one through Fidelity where I already have a brokerage account. Just seems like everyone opens one through a state plan, I don't really hear of anyone using Fidelity, Vanguard, etc. 

529s do not exist outside of the state plans, so you have to choose one of the state plans to go through.   Some states give you a tax deduction if you contribute to the state plan that you live in, but some do not.    You can choose any state plan to open a 529 through. 

[gt7301b]

Clark Howard has a good guide for 529 plans. He actually ranks the Minnesota plan pretty highly, so I would stick with that. If you go with a different state plan the Utah plan is the one I see recommended.

clark.com/personal-finance-credit/investing-retirement/529-plan/

[whitemerlot]

I’m in MN and have been happy with the Utah plan. If I were to open one now, I’d probably do the vanguard one, which is Nevada, because I have several other accounts with vanguard.

[coffeebean]

I’m in MN, and have our kids’ 529s through Utah.  There aren’t any incentives to go with the MN plan, but you do get a tax deduction for your contributions.

[mplsmom23]

Jan 10, 2022 22:10:37 GMT -5 coffeebean said:

I’m in MN, and have our kids’ 529s through Utah.  There aren’t any incentives to go with the MN plan, but you do get a tax deduction for your contributions.

Ditto all of this. Minnesotan that has been quite happy with the Utah plan for the past 10+ years.

[dr.girlfriend]

Ours is at Fidelity, but it's still a PA state plan I believe. I think there's a little benefit sometimes to using your own state's plan but not enough to counterbalance it not being a good one. From what I recall PA was one of the best-rated ones anyway so that's why we picked it.