Top 10 Performing 529 Plans 2021
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By Savingforcollege.com

February 23, 2021

Each quarter Savingforcollege.com ranks the best 529 plans based on one-, three-, five- and 10-year investment performance.

Our Performance Ranking Methodology was developed in 2012 and is widely used by families and industry professionals. We calculate a “performance score” by analyzing the reported investment performance of a subset of portfolios from each state’s 529 savings plan programs. The plans are then ranked according to their score.

These rankings are intended to help guide your decision when selecting a direct-sold 529 plan. For more details, please view our methodology.

Keep in mind that investment performance is just one factor to consider when choosing a 529 college savings program. It’s also important to make sure the 529 plan has low fees, since the more you pay in fees the less you’ll be able to save for college.

You may also be able to boost your savings with a state income tax credit or state income tax deduction for 529 plan contributions (in all but seven of these states you must use your home state’s plan to qualify).

This slideshow highlights the 529 plans with the best performance scores, based on three-year investment performance. Read on to see if your state’s plan made the top 10 list.

Best 529 plans

The top-performing 529 plans

Rankings as of December 31, 2020, based on three-year performance.

Michigan Education Savings Program

10. Michigan

Performance Score: 34.99

The Michigan Education Savings Program (MESP) is a low-cost, direct-sold 529 plan that is available nationwide. It offers variety of investment options from TIAA-CREF, including enrollment year portfolios, multi-fund portfolios, a single fund option and a principal protection option.

Additional benefits

  • Contributions are deductible from Michigan state income tax up to a certain limit.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.
Direct Portfolio College Savings Plan

9. Colorado

Performance Score: 32.42

The Direct Portfolio College Savings Plan is a low-cost, direct-sold 529 plan that is available nationwide. It offers a variety of Vanguard investment options, including age-based and static portfolios.

Additional benefits

  • Contributions are fully deductible from Colorado state income tax.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.
Pennsylvania 529 Investment Plan

8. Pennsylvania

Performance Score: 32.21

The Pennsylvania 529 Investment Plan is a low-cost, direct-sold 529 plan that is available nationwide. It offers a variety of age-based and static Vanguard investment options, including a socially responsible equity portfolio.

Additional benefits

  • Contributions are deductible from Pennsylvania state income tax up to a certain limit.
  • Every child born in the Commonwealth receives a $100 contribution through the Keystone Scholars Program.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.

7. Iowa

Performance Score: 30.78

College Savings Iowa is a low-cost, direct-sold 529 plan that is available nationwide. The plan offers a variety of age-based and static portfolio investment options from Vanguard.

Additional benefits

  • Contributions are deductible from Iowa income tax up to a certain limit.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.
The Vanguard 529 College Savings Plan

6. Nevada

Performance Score: 30.12

The Vanguard 529 College Savings Plan is a low-cost, direct-sold 529 plan that is available nationwide. It offers a variety of Vanguard investment options, including Target Enrollment Portfolios, multi-fund portfolios and single-fund individual portfolios.

Additional benefits

  • The program offers an e-gifting platform for receiving 529 plan gift contributions.
START Saving Program

5. Louisiana

Performance Score: 28.75

The START Saving Program s a low-cost, direct-sold 529 plan that is available exclusively to Louisiana residents. It offers age-based and static portfolio options, which include investments from Vanguard and the Louisiana State Treasurer’s office.

Additional benefits

  • Contributions are deductible from Louisiana income tax up to a certain limit.
  • The state provides matching contribution of 2%-4% for Louisiana residents.
CollegeAdvantage

4. Ohio

Performance Score: 28.29

Ohio’s 529 Plan, CollegeAdvantage, is a low-cost, direct-sold 529 plan that is available nationwide. It offers age-based, risk-based and enrollment-based portfolios from Vanguard and DFA Funds, and two FDIC-insured investment options from Fifth Third Bank.

Additional benefits

  • Contributions are deductible from Ohio income tax up to a certain limit.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.

3. West Virginia

Performance Score: 27.92

The SMART529 WV Direct College Savings Plan is a low-cost, direct-sold 529 plan that is available exclusively to West Virginia residents. It offers low fees and a variety of investment options to help you grow your college savings.

Additional benefits

  • Contributions are fully deductible from West Virginia income tax.
  • Plan beneficiaries who are born or adopted in West Virginia are eligible for a $100 seed contribution through the SMART529 Bright Babies Program.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.

2. Indiana

Performance Score: 27.02

The CollegeChoice 529 Direct Savings Plan is a low-cost, direct-sold 529 plan that is available nationwide. It offers age-based and individual portfolio options from Vanguard, DFA and other fund families. The savings portfolio invests in the NexBank High-Yield Savings account.

Additional benefits

  • Residents may claim an Indiana state tax credit for contributions up to a certain limit.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.

1. New York

Performance Score: 26.81

New York’s 529 College Savings Program – Direct Plan is a low-cost, direct-sold 529 plan that is available nationwide. It offers a variety of diverse investment options featuring Vanguard mutual funds.

Additional benefits

  • Contributions are deductible from New York income tax up to a certain limit.
  • The program offers an e-gifting platform for receiving 529 plan gift contributions.

Next: See how we rank 529 plan performance + the full list

How we rank 529 plan performance

We developed a special methodology to rank each state’s 529 plan program.

Step one: We select specific portfolios from each 529 plan that can be compared on an apples-to-apples basis to portfolios in other 529 plans, based on their allocation among stocks, bonds and short-term instruments (money market and guaranteed investments).

We place each portfolio in one of seven different asset-allocation categories, ranging from 100 percent equity to 100 percent short-term.

Step two: Within each of the seven categories, we compare historical performance of the selected portfolios and assign each plan a percentile ranking between one (best) and 100 (worst).

Separate rankings are developed for one-, three-, five-, and 10-year investment performance.

Step three: We take the average of each 529 plan’s percentile rankings in the seven asset-allocation categories to produce a combined or ‘composite’ percentile ranking. We then produce reports showing how the 529 plans rank against each other in their composite percentile rankings.

Note: We currently produce these composite rankings for one-, three-, five- and 10-year investment performance.

For a more in-depth explanation of our methodology, please read our white paper.

Here is the full list of direct-sold 529 plan rankings Q4 2020.

More information

Only our Premium subscribers have access to composite rankings for advisor-sold 529 plans, to the underlying data supporting the rankings and to separate one-year, three-year, five-year and 10-year rankings for each of the seven different asset-allocation categories.

In addition, subscribers can easily look up the historical performance for every 529 plan portfolio in every available share class by using our Fee and Performance Lookup Tool.

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At Savingforcollege.com, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

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