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Ohio Tuition Trust Authority

08/02/2021 | Press release | Distributed by Public on 08/02/2021 03:34

What Is On Ohio 529 “Top Ten List” For Q2 2021

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You want to make the smartest decision possible in all aspects of your life. When you start saving for your child's future higher education in Ohio's 529 Plan, CollegeAdvantage, you select which investment options you would like to place your funds.

Ohio's 529 Plan offers a diverse range of investment options from which you can build your college-savings strategy. These 529 saving options include ready-made age-based portfolios, ready-made risk-based portfolios, individual investment options, and FDIC-insured banking options, all provided from our partners and leading investment managers - Vanguard, Dimensional Fund Advisors, and Fifth Third Bank. Ohio's 529 Plan also offers tools and calculators to help you shape the college savings plan that right for your family's needs.

If you are wondering in which investment options other account owners have selected to save for college, here's our latest 'Top Ten List.' These portfolios hold the largest balances of customers' Direct Plan accounts, for the second quarter of 2021.

Top 10 investments options in the Ohio Direct 529 Plan

The top 10 investment options with the highest value of assets under management (fund balances in millions, as of June 30, 2021) are:

  1. Vanguard Aggressive Age-Based Portfolio (ready-made age-based portfolio), $2,059.72
  2. Vanguard Moderate Age-Based Portfolio (ready-made age-based portfolio), $1,145.90
  3. Vanguard 500 Index Option (individual investment option), $1,029.31
  4. Advantage Age-Based Portfolio (ready-made age-based portfolio), $1,022.87
  5. Vanguard Aggressive Growth Index Portfolio (ready-made risk-based portfolio), $720.65
  6. Vanguard Extended Market Index Option (individual investment option), $368.04
  7. Vanguard Growth Index Portfolio (ready-made risk-based portfolio), $367.87
  8. Vanguard Wellington Option (individual investment option), $326.19
  9. Vanguard U.S. Growth Option (individual investment portfolio), $287.69
  10. Vanguard Interest Accumulation Portfolio (individual investment option), $254.51

529 plans can be used for whatever comes after high school, including federally accredited trade and specialty schools, apprenticeships, community colleges, certificate programs, four-year universities and colleges, graduate school, law school, and medical school. So, if your child chooses to further their education by attending a trade school, apprenticeship, or certificate program, you can also use your 529 account to pay for qualified costs there.

Why Save For College In Ohio 529 Plan?

There are many reasons why to save for your child's future higher education in Ohio's 529 Plan, especially the tax benefits.

First, earnings in a 529 plan are tax-free, so all investment growth is yours to cover college costs.

Second, 529 plan withdrawals to cover qualified higher education expenses are tax-free at federally accredited programs. These expenditures include tuition; room and board (on and off campus); mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and classes; and certain expenses for a special-needs student. Qualified expenses for accredited apprenticeships - like fees, textbooks, supplies, and equipment like required trade tools - can be paid with 529 withdrawals. Also, student loan repayment is also a 529 qualified withdrawal. Any student loan that qualifies for the federal student loan income tax deduction can now be paid with a 529 distribution. There is a $10,000 lifetime limit per 529 beneficiary. However, an additional $10,000 can be used to repay qualified student loans for each of the beneficiary's siblings.

Third, Ohio residents who contribute to Ohio's 529 Plan can deduct their contributions from their taxable state income. This deduction amount is $4,000 per year, per beneficiary, with unlimited carry forward, which means that the $4,000 is not a contribution cap. If an Ohio taxpayer contributes more than $4,000 in one year, they can continue to subtract $4,000 per year, per beneficiary, from their State of Ohio taxable income until all the 529 contributions are deducted.

​Honors for Ohio's 529 Plan

If you are ready to start saving for your children's future higher education and want to learn more about tax-advantaged 529 plans, Saving For College is an unbiased, industry-trusted informational website, which provides detailed analysis and articles on 529 plans, financial aid, and scholarships, as well as tools to estimate college expenses.

Savingforcollege.com also ranks the nation's 529 programs based on how well they serve both in-state and out-of-state residents with its 5-Cap Rating. Ohio's Direct 529 Plan has earned the top 5-Cap Rating for both in-state and out-of-state residents as of March 31, 2021. This makes Ohio's 529 Plan one of only six Direct 529 plan nationwide to achieve this honor for both in-state and out-of-state residents.

Ohio's 529 Plan also tops the long-term performance rankings from Savingforcollege.com. As of March 31, 2021, CollegeAdvantage Direct 529 Plan ranks first in the nation for the best investment performance in the ten-year category. Ohio's Direct Plan also ranks second in the nation in the three-year category, sixth in the nation in the five-year category.

Additionally, Ohio's 529 Plan has been named one of Military Saves' Savings Champion for our continual support of this important program. Military Saves is part of the nonprofit Consumer Federation of America and is an initiative of America Saves. Military Saves works with government agencies, defense credit unions, military banks, and nonprofit organizations to promote savings and debt reduction.

Morningstar ranks Ohio's Direct 529 Plan as Silver. In addition, BlackRock CollegeAdvantage 529 has a bronze ranking. This makes Ohio one of only four state programs that have their Direct and Advisor 529 Plans ranked as medal-class college savings programs by Morningstar. The high ranking for both CollegeAdvantage 529 Plans highlights the strength of these two college savings plans as well as the industry's regard for Ohio's 529 Plan as one of the best in the nation.

Forbes Advisor ranks Ohio's 529 Plan as one of the six best college savings programs in the nation for 2021. According to their explanation: 'Ohio's 529 Plan comes with features in line with the other plans on our list, including low fees, a range of investment options and a tax deduction for Ohio taxpayers. … The plan also comes with a minimum contribution, both to open the account and for each contribution thereafter. But it is small ($25) and likely manageable for many plan participants.'

Also in 2021, CNBC selected Ohio's 529 Plan as one of the five best programs nationwide. As they wrote, 'There isn't much not to like about the CollegeAdvantage 529 plan - there's a good mix of investment options (including FDIC-insured accounts), low fees and plans from top companies like Dimensional Fund Advisors. In fact, overall management fees are some of the lowest we've seen. Combined with low expense ratios, this makes this plan one of our top picks.'Visit Ohio's 529 Plan online to start saving today for your child's future education. An investment in a 529 plan is an investment in your child where every dollar saved today is a dollar that doesn't have to be borrowed later. A 529 account can be used for whatever comes after high school. Learn, plan and start with Ohio's 529 Plan today at CollegeAdvantage.com.

Posted on August 02, 2021

Ohio Tuition Trust Authority