You want to make the smartest decision possible in all aspects of your life. When you start saving for your child’s education with Ohio’s 529 Plan, CollegeAdvantage, you select which investment options you would like to invest your funds.
Ohio’s 529 Plan offers a diverse range of investment options to build your college-savings strategy. These 529 saving options include ready-made target enrollment portfolios, ready-made risk-based portfolios, individual investment options, and FDIC-insured banking options, all provided from our partners and leading investment managers — Vanguard, Dimensional Fund Advisors, and Fifth Third Bank. Ohio’s 529 Plan also offers tools to help you shape the college savings plan that right for your family’s needs.
If you are wondering in which investment options other account owners have selected to save for college, here’s our latest “Top Ten List.” These portfolios hold the largest balances of customers’ Direct Plan accounts, for the second quarter of 2024. Additionally, as of June 30, 2024, Ohio's 529 Plan Assets Under Management (AUM) is $17.63 billion.
Top 10 investments options in the Ohio Direct 529 Plan
The top 10 investment options with the highest value of assets under management (fund balances in millions, as of June 30, 2024) are:
- Vanguard Ohio Target Enrollment Portfolio (ready-made age-based portfolio), $3,784.31
- Vanguard 500 Index Option (individual investment option), $1,581.23
- Advantage Age-Based Portfolio (ready-made age-based portfolio), $1,214.51
- Vanguard Aggressive Growth Index Portfolio (ready-made risk-based portfolio), $911.43
- Vanguard Growth Index Portfolio (ready-made risk-based portfolio), $412.66
- Vanguard Wellington Option (individual investment option), $354.17
- Vanguard U.S. Growth Option (individual investment option) $343.65
- Vanguard Extended Market Index Option (individual investment option), $303.76
- Vanguard Moderate Growth Index Portfolio (ready-made risk-based portfolio), $250.54
- Fifth Third Certificate of Deposit Account (individual investment option), $248.26
Ohio’s 529 Plan can be used for college or career training after high school at any institution that accepts federal financial aid, including trade and specialty schools, apprenticeships, community colleges, certificate programs, four-year universities and colleges, graduate school, law school, and medical school.
Save in Ohio for 529 tax benefits
There are several reasons why to save for your child’s future education with Ohio 529, especially the tax benefits.
First, earnings in a 529 plan are tax-free, so all investment growth, contributions, and compound interest are yours to cover qualified costs.
Second, 529 plan withdrawals to cover qualified higher education expenses are made tax-free for federally accredited programs. These expenditures include tuition; room and board (on and off campus); mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and classes; and certain expenses for a special-needs student. Qualified expenses for accredited apprenticeships — like fees, textbooks, supplies, and equipment like required trade tools — can be paid with 529 withdrawals. Also, student loan repayment is also a 529 qualified withdrawal. Any student loan that qualifies for the federal student loan income tax deduction can now be paid with a 529 distribution. There is a $10,000 lifetime limit per 529 beneficiary. However, an additional $10,000 can be used to repay qualified student loans for each of the beneficiary’s siblings. 529 accounts can also be used to pay K-12 tuition up to $10,000 per student, per year, for enrollment at public, private, or religious elementary or secondary schools. Additionally, any remaining funds in a 529 after the beneficiary has finished their higher education can be rolled over to a Roth IRA for the same beneficiary, after meeting certain requirements.
Third, Ohio residents who contribute to Ohio’s 529 Plan can deduct their contributions from their taxable state income. This deduction amount is $4,000 per year, per beneficiary, with unlimited carry forward, which means that the $4,000 is not a contribution cap. If an Ohio taxpayer contributes more than $4,000 in one year, they can continue to subtract $4,000 per year, per beneficiary, from their State of Ohio taxable income until all the 529 contributions are deducted.
Honors for Ohio’s 529 Plan
If you read financial websites, you will discover the high regard for Ohio’s 529 Plan. Financial industry organizations like Morningstar, Investopedia, CNBC, and Forbes have all rated Ohio’s 529 Plan amongst the best college savings programs in the nation. Here’s what they had to say.
Trusted financial industry investment research company Morningstar annually reviews the nation’s 529 college savings programs. Morningstar then ranks the 529 plans in a report released in November 2023. CollegeAdvantage Direct 529 Plan maintained its silver rating for the eleventh year in a row. In addition, BlackRock CollegeAdvantage, Ohio’s Advisor 529 Plan retained its bronze ranking. This makes Ohio one of only two states that have both their Direct and Advisor 529 Plans ranked as medal-class college savings programs. The high ranking highlights the strength of and the industry’s regard for Ohio’s 529 Plan as one of the best in the nation.
Business Insider has placed Ohio’s 529 Plan in their Best 529 Plans for 2024 article. The article stated that, “For a low $25 minimum, the Ohio-based 529 direct-sold savings plan offers a diverse selection of age-based, enrollment-based Vanguard and DFA mutual fund portfolios with tax-free growth. Plus, an individual fund portfolio option. You can also invest in CDs through a Fifth Third Bank savings account ($500 minimum). Single and joint filers can get a tax deduction of up to $4,000 annually.”
Time Magazine has also named Ohio’s 529 Plan on their Best 529 College Savings Plans for 2024 list. Their analysts noted, “Ohio CollegeAdvantage is open to anyone age 18 or older who wants to make tax-advantaged contributions to college savings. There is a state income tax deduction of up to $4,000 per child per year, and there are no restrictions on how many accounts you can open for different beneficiaries. The lifetime contribution limit is well above what other states offer, allowing you to contribute a significant amount toward your student’s education. CollegeAdvantage leans heavily on Vanguard funds, which have a reputation for being exceptionally inexpensive. You can also choose from individual fund options, including bond-focused and equity-based portfolios.”
Forbes Advisor continues to rank Ohio’s 529 Plan as one of the six best college savings programs in the nation. According to their explanation: “Ohio’s 529 Plan comes with features in line with the other plans on our list, including low fees, a range of investment options and a tax deduction for Ohio taxpayers. … The plan also comes with a minimum contribution, both to open the account and for each contribution thereafter. But it is small ($25) and likely manageable for many plan participants.”
CNBC also continues to select Ohio’s 529 Plan as one of the ten best programs nationwide. As they wrote, “With the CollegeAdvantage (Ohio) 529 plan, anyone can sign up. There’s a good mix of investment options (including FDIC-insured accounts), low fees and plans from top companies like Vanguard, Dimensional Fund Advisors and Fifth Third Bank. There’s just a minimum contribution amount of $25 and Ohio residents can get a tax deduction.”
Money Inc. ranks Ohio’s 529 Plan, CollegeAdvantage, second in its list of the top ten 529 programs nationwide. They highlighted the “tax break for Ohio residents, a diverse selection of investment alternatives, and low fees.”
Since 1989, Ohio’s 529 Plan has been helping families across the nation save for their children’s higher education. Ohio’s 529 Plan covers qualified costs at any four-year college or university, two-year community college, trade or vocational school, apprenticeship approved by the U.S. Labor Department, or certificate program nationwide that accepts federal financial aid. Learn, plan, and start for as little as $25 today at CollegeAdvantage.
