College 529 Plans: Can I Invest in Any State’s Plan?

Mother Reviewing 529 Plans With SonsA 529 college savings plan is an investment vehicle you can use to plan for your child’s future educational expenses. Though each state has its own college 529 plan, you are not restricted from purchasing a plan outside your state of residence.

State 529 Plans vs. 529 Plans from Institutions of Higher Education
There are two main types of 529 plans: those offered by states and those offered by qualified educational institutions. You can choose any plan you want, whether it is sponsored by your state, a different state, a college in your state or a college in another state. However, keep in mind that the plans offered by states may differ considerably from the plans offered by institutions of higher education. While states can offer both prepaid tuition plans and college savings plans, institutions of higher education can only offer prepaid tuition plans.

Prepaid Tuition Plans vs. College Savings Plans
A prepaid tuition plan is a savings plan that permits you to pay for your child’s college tuition in advance. To invest in such a plan, you must choose a university or group of universities before opening the account. A college savings plan, on the other hand, is an investment account that permits you to put money aside for educational expenses without designating the school your child will attend. Both plans offer advantages and disadvantages. For example, a prepaid tuition plan usually locks in the price of the beneficiary’s tuition when the plan is established. However, it restricts the beneficiary’s choice of school considerably.

Choosing a College Savings Plan
Though you are not restricted to choosing the 529 college savings plan set up by your state, your state may offer incentives in order to attract your business. Every 529 plan is different, and each state will emphasize different features to entice investors. No one 529 plan is perfect for every investor, and there are other viable college savings options that may be better suited to meet your needs. For example, the Gerber Life College Plan is an individual endowment policy that provides a way to save without investment risk. While other plans may fluctuate with the ups and downs of the stock market, with the Gerber Life College Plan you’ll know exactly how much money will be available to you for your child’s college education. Plans are available from 10,000 to $150,000, maturing in 10 – 20 years. Other features include the ability to use the money paid at maturity for anything, even expenses unrelated to college, without any penalty. And a unique aspect of the Gerber Life College Plan is that it provides adult life insurance for added security.

No matter what college savings plan you opt to invest in, the important part is that you start saving. The sooner you start, the better you’ll be prepared for the future.

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