If your New Year’s resolutions include saving more for a loved one’s future education, your mind may have turned to 529 plans.
Though the performance of these plans improved last year, according to a recent Wall Street Journal story, there are many such plans, and they vary widely in quality. They particularly vary in terms of the investment options they offer once you’ve put your money into the plan.
“Saving for college is a major financial planning item. Local governments have set up tax exempt saving plans for College which is a great idea. Somehow, what we have ended up with is a confusing mess. The problems come when you look into the details of the plans,” says Simon Napper, president of MyPlanIQ, a firm that analyzes investing options in corporate 401(k) plans as well.
As illustration, Napper put together an analysis of how well investors would have done in the following state plans if they had allocated their investments in a diversified manner. Continue reading