Saving for college in Iowa (529 plans)
by Michael (Jesus Christ is LORD!) C.
rating: 10 | comments: 5
March 04, 2008 03:24 PM EST -- OK, I'm looking at 529 plans here in Iowa. I want to try to provide for my daughters' educations while also, hopefully, providing some tax relief too. While looking on SavingForCollege.com , . . . moreI also went and posted it as a question over on Boomertowne and directly to Terry Savage. Here is the answer I got from Terry.
"The REAL difference between these two plans is the fees/commissions you will pay to join. The 529 plan business was moving slowly because few people are smart enough to go to their state's website. So the various states decided to appeal to financial planners to help sell them. But many financial planners only sell products with commissions! So states developed the "same" plans but with a fee to "advisors." In most state plans, that fee comes either out of the state's annual cut — or out of the invested money. I'm not sure about the Iowa plan, but you can contact your state treasurer and ask whether the additional fees you pay come out of your investment — or out of the state's income from the money management firm."
Hopefully this answer helps out any of you who are wondering about 529 plans and also if you find that your state appears to be offering more than one plan.
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Comments: 4