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In the latest evaluation by Morningstar and Saving for College, several 529 college savings plans have emerged as the top choices for parents and guardians looking to save for their children's education.
The Maryland College Investment Plan has been awarded the prestigious "Top of the Class" designation by Saving for College in their 2024 529 Ratings, making it one of only nine direct-sold plans to receive this distinction.
Edvest 529 Plan (Wisconsin) has also made significant strides, receiving Morningstar Analyst Ratings in Gold, Silver, and Bronze for 2024. Notably, it has lowered its manager fee to 0.05%, further reinforcing its value proposition for savers.
Several American Funds 529 plans have also shown strong performance, with the American Funds Multi-Sector Income 529-A, American Funds Global Insight 529-F-2, and American Funds Income Fund of America 529A receiving Silver Medalist Ratings from Morningstar. These plans are commended for their sound investment processes and strong management teams.
The Pennsylvania Treasury Department has also made strides in reducing fees for their 529 Investment Plan as assets grow. Furthermore, long-term 529 balances can now be converted to Roth IRAs, making education savings plans an even more powerful tool for both funding education and kick-starting retirement plans.
Morningstar's updated methodology for evaluating 529 education savings plans, introduced in July 2024, places a greater emphasis on the Process Pillar. This year, 32 plans earned Morningstar Medalist Ratings of Gold, Silver, or Bronze, with the Pennsylvania 529 Investment Plan benefiting from topnotch state oversight.
The following table summarises the top-rated 529 plans for 2024:
| Plan Name | Rating/Recognition | Key Features | |----------------------------------|----------------------------------|------------------------------------------------| | Maryland College Investment Plan | Top of the Class (Saving for College 2024) | Highly selective designation among direct plans | | Edvest 529 Plan (Wisconsin) | Morningstar Ratings (Gold/Silver/Bronze) | Low fees (0.05% manager fee), over $6 billion assets | | American Funds Multi-Sector Income 529-A | Morningstar Silver Medalist | Strong management, solid investment process | | American Funds Global Insight 529-F-2 | Morningstar Silver Medalist | Strong management team, sound process | | American Funds Income Fund of America 529A | Morningstar Silver Medalist | Moderate fees, robust asset base |
Other plans that have received upgrades this year include Maine's NextGen College Investing Plan Direct, Ohio's BlackRock CollegeAdvantage 529 Plan, and California's ScholarShare College Savings Plan.
As asset managers dedicate more research and resources to specifically help education savers, stewardship standards are rising, ensuring that parents and guardians can make informed decisions when choosing a 529 college savings plan.
- In the realm of personal-finance, parents and guardians can consider index funds like the American Funds Multi-Sector Income 529-A, American Funds Global Insight 529-F-2, and American Funds Income Fund of America 529A, which were commended for their sound investment processes and strong management teams when making choices for their children's education savings with 529 plans.
- Online education platforms can be beneficial for anyone seeking education-and-self-development in finance, such as learning about asset allocation strategies for personal-finance, or understanding the differences between various 529 college savings plans.
- As part of their strategy to optimize their finance, some parents might choose to allocate assets to diversified investment options such as index funds in 529 college savings plans like the Maryland College Investment Plan, the Edvest 529 Plan (Wisconsin), or the American Funds family of 529 plans, which have received recognition for their performance and management.
