EdVest - I'm less than impressed
| I'm doing some research this morning into 529 plans for the soon-to-arrive little bugger, but I'm still not convinced 529 plans are the way to go. There's two plans I'm interested in primarily, and both come highly rated. Wisconsin's EdVest program, which gains us a state tax deduction on the front-end, and state tax-free withdrawals on the back-end, as well as Iowa's highly rated 529 plan (where we would lose all state tax benefits, unless I convince Mr. Savvy to move to Iowa, but hopefully gain some great investment options). So far, most of my research has been devoted to Wisconsin's EdVest, and I'm less than impressed. Sure, the tax benefits are great, but the investment options, well, suck. There are only two investment options, fixed allocation or enrollment based. The fixed allocation means the account owner can choose ONE and only ONE of their 10 overpriced, and often under performing, funds. The enrollment based option allows for the investor to choose an even more overpriced aggressive, moderate, or conservative fund of funds. They have two mediocre Vanguard funds as part of the fixed allocation options, but somehow the expense ratios have more than doubled what Vanguard charges, and neither is a good option when you can only invest your entire balance in a single fund. The other part that bothers me is that, while I can change WHERE my contributions are invested at any time (as long as all money is in the same fund), I can only change how much is contributed once per year. Heaven forbid someone loses a job, has unexpected expenses, or wants to increase their investment amount. This bothers me because EdVest is supposed to be one of the better plans out there. I'm going to keep researching to see if there is a better option, but if I choose another state's program I am going to end up leaving the tax deductions on the table. I'll have to do lots of fancy, and probably wrong, math to see if it is worth it. |
posted by savvy at 9/16/2007 07:33:00 AM
Comments on "EdVest - I'm less than impressed"
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Todd D. said ... (9:53 PM) :
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sarah said ... (8:53 PM) :
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Reid said ... (9:18 PM) :
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Anonymous said ... (6:42 PM) :
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Brian said ... (9:59 AM) :
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RMGL said ... (6:38 PM) :
post a commentWe went with the New York 529 plan. (I am in Texas.)
Low expense ratio and some okay fund choices.
Have you considered any other options besides 529's? We are currently in the same situation-first one due in October-and have found results similar to yours, that most of the 529's out there aren't particularly appealing. I'd love to hear your thoughts about the other college savings options out there.
All of my research indicated that the 529 is the most tax-advantaged and flexible option out there, without a doubt. I held off on creating one for our daughter until after Congress made the federal tax advantages permanent, which they did in 2006, when she was two. We just had our second baby last Friday, and I'll be creating a 529 plan for him just as soon as we get his Social Security number.
Of course, it does help to live in a state that offers a state tax deduction and a wide array of low cost index funds (our home state of Ohio wins on both counts). I'm sorry to hear that Wisconsin's 529 plan is so lame! You probably know this already, but savingforcollege.com is an excellent resource for comparing all the state 529 programs, and it does offer info on other savings programs, like the coverdell.
I moved from wisconsin still keep the edvest plan - no more big contributions as Edvest is not the best 529 plan for a non-resident.
However I feel edvest is the best plan available for a wisconsin resident. Vangaurd Balalnced fund is my fav, underlying fund is Vanguard wellington - yes there is a premium on expense ratio added on 529. You can waive fees etc by having an automatic payment setup, which you could alter at anytime thru wellsfargo investor site.
I just went through this decision with my 2 year old. I'm in CO so we did go with the 529 age based plan here. If it helps there was an article in Money magazine last month that talked about each states 529 plans. I didn't see the entire article on their web site but they do have their chart of nationaly and state recomended plans:
http://money.cnn.com/pf/features/college_guide/table_best.html
Yes - we are also less than impressed.
We participated in this program and now it is time to withdrawl funds to pay for college. We requested a check 3 weeks ago and it never came. We called again 2 weeks ago to verify the check had been mailed. We called again last week and had them stop payment on the first check and issue a new check. That check was to have been mailed a week ago but we still don't have that check either.
The ironic part is that through all of this, we have been receiving statements in the mail, so the mail is not an issue. Seems we stopped earning interest 3 weeks ago when we made the initial check request.
I guess they just keep using your money. Perhaps everyone should consider a wire transfer for their withdrawls.