529 Comparison

529 Iowa College Savings Plan

The College Savings Iowa 529 Plan offers fourteen portfolios from which to choose. The program is managed by UPromise Investment Advisors, LLC and the investment manager is Vanguard.

The Iowa 529 Plan allows you to save for anyone's college education with only a $25 minimum deposit. There are four age-based portfolios, Aggressive Growth, Growth, Moderate Growth and Conservative Growth. Depending on the current age of the beneficiary, these invest more aggressively when younger and move towards more conservative allocations as college age nears.

As an example, the Aggressive Growth portfolio uses a 100% investment in stocks for beneficiaries up to ten years old and drops to 20% in stocks and 80% in bonds once age 19 has been reached. On the other hand, the Conservative Growth portfolio begins with just a 60/40 split between stocks and bonds for ages 1-5 and ends up with 100% Moneymarket for the 19 year old.

Many people do not feel comfortable with the automatic movement of funds and would prefer to move the investments around manually. The Iowa 529 Plan provides you with ten portfolios that do not change with time. Here you can decide on anything from International or domestic stocks down to 100% Moneymarket or a combination. As with most college savings programs, there are no guarantees with this Iowa 529 Plan and the account value may move up or down depending on the individual investments chosen.

Your investment in the College Savings Iowa 529 Plan will grow federal and state tax-deferred. 529 owners who are Iowa taxpayers can deduct up to $2,975 per year, per beneficiary from their Iowa State income tax return. So a husband and wife each contributing to two plans could deduct up to 4 X $2,975 = $11,900 per year.

Withdrawals from the Iowa 529 Plan can also be used for various other educational expenses like room and board, books, supplies and equipment. Qualified withdrawals will also be Federal and state tax free. Annual maintenance and administrative fees for the accounts are only .34%, which makes them even more attractive as an investment vehicle.

For more information on Iowa's 529 plan options, visit http://collegesavingsiowa.com/.

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