How to compare 2 state College Savings 529 Plans
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Hi,
We are planning to start College savings 529 Plan for our kid ( 10 yr old).
We live in ILLINOIS.
Illinois does offer 529 college saving plan. Most of them say to start in-state Illinois to get the tax savings.
We do have Vanguard account for Roth savings and they offer 529 savings as well for Nevada state.
Trying to see which would work well for our situation ( IL vs NV ).
But how much of tax savings do we really get is my question for our in-state IL 529 compared to Nevada 529.Tax situation:
Married filing jointly with total income of 130K. After all the deductions we are taxed for 100K a yearly with 25% tax bracket.Planning to save lump sum of around 100K into this 529 College savings. To get the in-state tax deduction we can save 20K every year for 5 years into Illinois 529 plan.
But based on the fees and performance which will work better in our situation. Illinois or Nevada or any other state 529 plans ?
Thanks in advance.
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My only input is that I think you can’t go wrong with Vanguard.
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Your state plan (Bright Start) offers a good array of funds, at reasonable expense ratios. These include both passively managed funds (referred to as Index) and some actively managed funds – these include some Vanguard funds, such as an S&P index fund at 0.10% annual investment management fee.
Your 4.95% state tax deduction will likely more than offset your investment fees, if you simply spread the 4.95% over an average 10-year holding period since your child is now age 10. So that will basically provide 0.50% per year.
Note it appears that TODAY is the deadline for funding the account to get the 2017 state tax benefit based on the information shown in the Tax Center on that site.
