Limited Investment Options
Like 401(k)s, 529 plans all offer a relatively limited lineup of investments. Depending on the plan you’re considering, that could mean that you don’t have a lot of good options.
For example, some plans are filled with expensive investments. And while cost isn’t the only factor to consider, it is the single best predictor of future investment returns and high-cost investments will be a significant obstacle to success.
The good news is that you’re allowed to choose any 529 plan offered by any state. You aren’t limited to your state’s plan and there are plenty of states that offer a strong lineup of high-quality, low-cost investments. You can see some of my favorite 529 plans here, and you can compare 529 plan costs here.
Like 401(k)s, 529 plans all offer a relatively limited lineup of investments. Depending on the plan you’re considering, that could mean that you don’t have a lot of good options.
For example, some plans are filled with expensive investments. And while cost isn’t the only factor to consider, it is the single best predictor of future investment returns and high-cost investments will be a significant obstacle to success.
The good news is that you’re allowed to choose any 529 plan offered by any state. You aren’t limited to your state’s plan and there are plenty of states that offer a strong lineup of high-quality, low-cost investments. You can see some of my favorite 529 plans here, and you can compare 529 plan costs here.
