How to Start a 529 Plan [Easy App Quick-Start]

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starting a 529 college savings account

is crucial to starting your kids right

but can be so confusing in this video

I'll show you exactly what I looked for

in comparing 529 plans then I'll walk

you step-by-step through setting up an

account in less than five minutes we're

talking how to start a 529 plan today on

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Joseph owed with the let's talk money

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never miss an episode nation we've been

talking about the importance of saving

for college lately those 529 plans but I

feel like I might have confused some of

you and when we looked at comparing the

best 529 plans last week but even on

those five steps trying to compare over

a hundred state plans can seem like an

impossible task getting your kids

started on a plan and getting those tax

benefits is critical though so I don't

want you to give up or get stuck in that

comparison stage so I wanted to do this

video to show you what I looked for when

starting my son's 529 plan I'll share a

few examples of state plans and then do

a step by step in getting started

I want to thank Eunice for sponsoring

this video au nest is an SEC registered

investment advisor that helps you set up

and manage your 529 plan open your

account and unist will help you pick the

right investments depending on how long

you've got until you need to start

paying those expenses you get an advisor

guided plan but without all the fees

that you pay with an average advisor you

ness charges a flat fee of just three

dollars a month on accounts under fifty

thousand instead of that Commission rate

that increases with your account you'll

also pay about half the fund fees

compared to the average advisor guided

plan so let's look at a few state plans

and I'll show you what I'm looking for

when comparing these then I'm gonna walk

you through getting started with a 529

plan we've first got the scholar share

529 that's the 529 plan in California

and this one is run by tiaa-cref since

2011 the plan offers two types of funds

by enrollment year so that target date

idea and 17 regular funds now the fees

on each of these funds can be a little

expensive up to 0.53% expense ratio but

they've also got some of those passive

funds that charge around a tenth of a

percent there's no tax benefit for

California income taxes though so you

definitely want to compare around if you

live in the state next we've got the

nest 529 which is Nebraska State 529

plan managed by First National Bank of

Omaha I picked this one as an example

because it's one that offers residents a

break on their state income taxes in

this case a deduction of your 529

contributions off income up to five

thousand dollars for each individual now

the plan offers age based and regular

funds through Vanguard State Street and

tier a price so you get a lot of options

here the problem was that when I went to

look for the fees here I couldn't find

it anywhere on the website in fact after

10 minutes looking here I had to find

another third-party 529 review website

that the plan fees are some of the

highest in the country as high as

fifteen hundred dollars over ten years

on a ten thousand dollar account so for

Nebraska residents this still might be a

good deal if you're getting that tax

break but definitely an example of the

need to watch for those fees finally

before I walk you through how to set up

a 529 account let's look at the bright

directions plan managed by Union Bank

and Trust and this is the one unist app

runs on so Illinois residents get up to

a ten thousand dollar deduction for each

person on their state income taxes so a

big potential savings there the plan

offers funds from dozens of providers

including Vanguard and tier o price you

get all the types of funds including an

age based target date and those

individual funds in a lot of these you

can even choose from an aggressive

moderate or conservative portfolio

you've got passive funds as well as

actively managed so the expense ratios

are fairly low here from just a tenth of

a percent up to about half a percent per

year I want to walk you through how to

open a 529 account and honestly it's

super easy on the unit step it works

through that bright directions program

so you've got the access to all those

low-cost funds and the advisor to help

you decide that's really why I like the

app besides built on that solid 529 plan

this is a mix between a college savings

account and a financial advisor but

without all the fees you see most

advisor plans are gonna charge sales

fees up to a five percent and then fees

on each fund and however much you have

in the account you nest flat fee pricing

and no sales commission means it's one

of the most cost efficient advisor

programs in the nation

opening an account takes less than a

couple of minutes and starts with your

child's name your name is just some

basic information

you'll also need yours and your child

Social Security number for confirmation

a nice feature here is the sliding

planner so you're gonna enter your

child's age and how much you think you

can save each month then the app is

gonna estimate how much you'll have in

the account and you can use the slider

to move around your monthly amount you

can sign the application digitally here

and then take a picture of your check to

link your bank account that's it that's

all it takes to open a 529 account you

can always see your account balance make

a deposit anything you need to do and

one feature I really like here is the

ability to get gifts into your 529

account from family and friends here's

something extremely important for those

of us with two or more Rugrats the

ability to open another 529 plan on the

same app and fund both of them so click

on the video to the right for a detailed

guide of 529 college savings plans

including the 7 most common questions

and how to save money on your taxes

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