08/01/2017
SMART529 plan lauded by college savings website

SMART529 WV Direct, a college savings plan offered by State Treasurer John Perdue’s office, has attained a “five-cap” ranking from savingforcollege.com, a leading college savings website. The five-cap designation is the site’s highest rating. The plan also rated fourth in the country for performance in three different year spans.

Savingforcollege.com released its list of the top-rated 529 plans based on flexibility, costs, investment performance and additional economic benefits such as tax incentives. There are 17 plans, including SMART529 WV Direct, that have garnered the five-cap ranking. The rankings are based on apples-to-apples comparisons of funds’ allocations among stocks, bonds, and short-term investment returns and prices averaged to produce a composite percentile ranking.

“Performance is one of several criteria that families should use when choosing a 529 fund, whose earnings and distributions are tax-free so long as the funds are used for education,” says Bernice Napack, writing for www.ThinkAdvisor.com. “Fees are another consideration as well as tax treatment. Some plans offer a tax benefit – credit or deduction – for state residents if they invest in that state’s plan; others offer a tax benefit for residents no matter what plan they choose.”

Fees have been declining in savings plans across the country, according to another recent study from savingforcollege.com. The study found that the mean fees for direct-sold plans, which include expense ratios as well as account maintenance investment management fees, fell 3.7% over the past six months.

The SMART529 WV Direct led this trend with fee reductions implemented this past February. In addition to low fees, SMART529 WV Direct offers several other important advantages. The plan does not require a minimum starting contribution, does not mandate subsequent contributions of any certain amount, and offers state and federal tax benefits. State residents may reduce taxable income for state tax purposes, dollar for dollar, based on the annual amount they contribute to a SMART529 WV Direct account.

“Our staff and team of investment consultants routinely review SMART529 funds and suggest changes to ensure there are attractive options for every investor,” Treasurer Perdue said.

SMART529 offers three plans, including WV Direct. In all, SMART529 has attracted approximately 120,000 investors from across the country, 30,000 of whom are state residents.

To open up a SMART529 account, go to www.SMART529.com.

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