In a follow up to my previous posts about saving for college with a 529 college savings plan, I’ve recently come across Kiplinger’s ranking of the top five college 529 savings plans.

I personally subscribe to Kiplinger’s as well as a few other personal finance magazines. While these magazines may not make you a millionaire overnight, they at least provide some education reading while at the job, commuting, etc.

My financial advisor recommend the Virginia CollegAmerica plan which makes sense since she works for Edward Jones and they push American funds. If you’re more comfortable with an advisor’s guidance then this is probably the best option for you.

The fund that caught my eye is the Utah Educational Savings Plan. This plan offers the lowest fees via nine Vanguard index fund portfolios. The expense ration is only .38% per year versus the .50% expense in the Nevada plan.

Kiplinger’s site also has a tool to find plans by state or by type. By type they mean one of the following: Broker Sold Savings Program, Direct Sold Savings Program, Prepaid Contract or Prepaid Unit/Government Savings. Many plans are available as both Broker Sold and Direct Sold. Direct Sold means you invest in the plan directly so you can cut out the middle man and (usually) get the plan sans extra fees and broker commissions.

Note that I was previously comparing the Vanguard Nevada 529 plan with the 529 plan from my home state of South Dakota. Kiplinger’s 529 search tool will show you a list of all the plans for your state along with a recommendation. In the case of South Dakota I received this advice:

Go with one of Kiplinger's top five 529 plans
Why? South Dakota doesn't have a state personal-income tax. No tax break for contributions to an in-state 529 plan means you can choose any plan you like.

So now I’m seriously considering the Utah 529 plan. Having just finished reading the Intelligent Investor, I think it’s in my best interest to find the lowest cost option around. Even though the performance of the South Dakota plan is pretty good, in the long run low fees could really help out. I need to do some more research. As I find more resources I’ll write about them here.

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