New_Age_Based_Ohio_529_Investments_Available

Ohio’s 529 Plan, CollegeAdvantage, offers updated ready-made age-based portfolios that reflect college-savings industry standards of smoother glide paths. A glide path determines the asset allocation mix within an investment option.

For an age-based 529 portfolio, the asset allocation mix is achieved through age bands. When the beneficiary is young, there is more stocks (equity) in the portfolio. Why? Stocks are affected by market volatility; so if there is an economic downturn, there will be more time for the college savings plan to recover. As the beneficiary grows older, the mix adjusts with each new age band, reducing the amount of equity and increasing the amount of more conservative investments such as fixed-income and cash preservation options.

The Advantaged Age-Based Portfolios (AABP) and the Vanguard Ready-Made Age-Based Portfolios now include additional age bands. This change will allow the asset allocation mix to rebalance more frequently. Originally, Ohio’s 529 Plan ready-made age-based portfolios had larger age bands of three to four years. This kept the investment in one asset allocation mix for a long period in which to weather any positive or negative fluctuations in the stock market.

Advantaged Age-Based Portfolios

Advantage Age-Based Portfolios (AABP), a blend of active management and passive-index based portfolios, adopted new age-based funds based on the beneficiary’s year of college enrollment. This approach allows the 529 account to stay in a single fund the entire time as the beneficiary heads toward their higher education. Within the portfolio, the asset allocation will rebalance quarterly.

Every two years, Ohio’s 529 Plan will add a new fund to the AABP. In August, the 2038 year of college-enrollment-date fund will be introduced as the age-based investment option for beneficiaries born between August 1, 2018 and July 31, 2020.

Vanguard Ready-Made Age-Based Portfolios

The Vanguard Ready-Made Age-Based portfolios, passive index-based investment options, increased the number of age bands within each of the three risk tracks — aggressive, moderate, and conservative.

Previously, the Vanguard portfolios included five age bands. Now, these investments have nine age bands, which will rebalance the asset allocation mix more often to create a smoother step-down glide path. There is greater amount of equity in the younger age bands that methodically moves towards being more conservative as the beneficiary nears college. However, each of the three risk tracks — aggressive, moderate, and conservative — will decrease the amount of equity in the portfolio differently. For example, the aggressive age-based portfolio will retain more equity in the older age bands as compared to the conservative track.

“We believe these changes will continue to make the CollegeAdvantage Age-Based Portfolios the most popular investment options in our lineup. Research shows account owners like the simplicity the aged-based options offer. The idea that the portfolio reduces risk the closer a child gets to college is very appealing,” said Tim Gorrell, executive director of Ohio Tuition Trust Authority, the state agency that administers Ohio’s 529 Plan.

These investment options were updates May 18-20, and were available effective May 21, 2018. 

To learn more about all the investment options available with Ohio’s 529 Plan, please visit CollegeAdvantage.com. Visit us online to open a 529 plan and start saving for future higher education expenses. Even small amounts can add up to big amounts over time by saving regularly. Ohio's 529 Plan, CollegeAdvantage, is your plan, your way.

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529 Short Course: New Parents

5 things every new parent needs to know about saving for education

  1. Why Ohio 529?
    529s are specifically created for higher education savings. Unlike a traditional banking account, a 529 account benefits from tax-free earnings and tax-free withdrawals. For Ohio residents, there is also a state income tax deduction for those contributions.
  2. It’s simple to start.
    You can open your 529 account online in minutes with as little as $25. With ready-made portfolio options, you don’t have to be a financial expert to feel confident in your savings plan choices.
  3. Set it and forget it with automatic deposits.
    The sooner you start saving, the longer your account benefits from the Ohio 529 tax advantages as well as compound interest. Many new parents take their 529 contributions off their to-do list by setting up small automatic deposits from either their banking accounts or paycheck. Also, with our ReadySave 529 app, it’s also easy to track and adjust your account right on your mobile device.
  4. Save for college, career training, and more.
    Ohio 529 can be used at over 30,000 schools of all kinds, nationwide, including universities; community colleges; trade, technical, and vocational schools; certificate programs; and apprenticeships. Your Ohio 529 account can also pay for K-12 tuition at a public, private, or religious school. And, if it’s not needed for educational expenses, you can now roll over your 529 to a Roth IRA.
  5. Others can help.
    It’s easy for family and friends to contribute to your child’s account and receive tax benefits for themselves. You can share your account’s unique Ugift number with others to contribute online without creating their own 529 accounts. Those who live in Ohio will also receive a state income tax deduction for their contributions. Also, you can sign up to have reminder emails sent to you and loved ones for the big milestones in your child’s life.

Hoping to find gold at the end of the rainbow? If you are saving with Ohio 529 CollegeAdvantage, you have the benefit of Ugift with your account, which is savings gold.

Ugift makes it easy for others to give to your Ohio 529 account. With Ugift, you generate a unique code which allows loved ones to contribute to your Ohio 529 savings plan without needing the actual account number. Once they have the Ugift code, your friends and family can visit Ugift529.com to make their online gifts directly to your 529.

When friends and family ask for gift ideas, share that you are saving for your child’s future education with Ohio 529. Then invite them to join in with gift contributions to your Ohio 529 account with Ugift. After all, a gift for your child’s education will truly last a lifetime.

The quickest and easiest way to pass along your child’s Ugift code is with the ReadySave 529 app, which you can access as an Ohio 529 CollegeAdvantage account owner. At the bottom of every page is an Ugift icon. Click on the gift symbol to view your Ugift code which you can send immediately as an invitation via texts, emails, and Facebook/Instagram chats from your phone.

Or log into your account online to view your child’s Ugift code to send to family and friends who would like to give the gift of education.

The Ugift code doesn’t expire. Which means whenever there is an occasion to celebrate­ like baby showers, holidays, birthdays, graduations, and special achievements, your family and friends can give to your Ohio 529 account. And they can choose to contribute as much as they want whenever they want. It can be a one-time gift or recurring gift; all they need is that Ugift code. Your loved ones’ contributions - whether big or small – will add up over the years. Added to the power of compound interest, these gifts will power your 529 savings to cover even more college and career training costs.

An added bonus for gift givers who live in Ohio: They are also eligible to receive a state income tax deduction for their Ohio 529 gift contributions, up to $4,000 per year, per beneficiary.

To learn more about all of the gifting options with Ohio 529 and order cards for special occasions, visit  529 Gift Central.

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