You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Paul Moeller wisely looks out of state to save for his kids' college educations. He and his wife, Hope, live in Burlington, Conn., but invest in the College Savings Iowa 529 plan for their two boys: Max, 4, and Sam, 2. Connecticut is among 24 states, including California, Florida and Texas, that don't offer tax breaks for 529-plan contributions. If you live in one of these states, Iowa's plan is a smart choice.
| Row 0 - Cell 0 | Invest in a Stellar Fund |
| Row 1 - Cell 0 | Buy Low-Price Stocks |
| Row 2 - Cell 0 | Save for College |
| Row 3 - Cell 0 | Defend Against Mother Nature |
| Row 4 - Cell 0 | Find a New Career |
| Row 5 - Cell 0 | Get a Tax Credit |
| Row 6 - Cell 0 | Make Money Doing Good |
| Row 7 - Cell 0 | Travel to Hawaii |
| Row 8 - Cell 0 | Employ a Virtual Butler |
| Row 9 - Cell 0 | Savor Wines of the World |
| Row 10 - Cell 0 | Send Your Kids to Camp Cash |
| Row 11 - Cell 0 | What Else $1,000 Can Do |
We like the plan because it has low costs and a variety of investment options, unlike many 529 programs. Compared with Connecticut's three investment choices, Iowa offers eight. You can pick portfolios that become more conservative as your child approaches college age or that comprise a mix of investments that don't change. And performance is good. The Iowa plan uses different combinations of Vanguard index funds. Its most aggressive option returned an annualized 21% over the past three years to May 1.
Investments in 529 plans grow tax-deferred, and withdrawals are currently tax-free if used for qualified educational expenses. Each state has its own limits and rules on contributions. Iowa's plan allows a $239,000 maximum contribution -- which should put your child through the most expensive Ivy League school.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You can make a contribution of as little as $25, so the plan fits easily under our $1,000 limit. And if you put $1,000 in a 529 plan today for your newborn, in 18 years it would be worth $3,996, assuming an 8% return. For more, see our Find the Best 529 Plan tool.
-- Thomas M. Anderson
-
Dow Leads in Mixed Session on Amgen Earnings: Stock Market TodayThe rest of Wall Street struggled as Advanced Micro Devices earnings caused a chip-stock sell-off.
-
How to Watch the 2026 Winter Olympics Without OverpayingHere’s how to stream the 2026 Winter Olympics live, including low-cost viewing options, Peacock access and ways to catch your favorite athletes and events from anywhere.
-
Here’s How to Stream the Super Bowl for LessWe'll show you the least expensive ways to stream football's biggest event.
-
9 Types of Insurance You Probably Don't NeedFinancial Planning If you're paying for these types of insurance, you may be wasting your money. Here's what you need to know.
-
New Ways to Use 529 PlansTax-free withdrawals from 529 plans could help you sharpen your job skills.
-
I Want to Help Pay for My Grandkids' College. Should I Make a Lump-Sum 529 Plan Contribution or Spread Funds out Through the Years?We asked a college savings professional and a financial planning expert for their advice.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
How Intrafamily Loans Can Bridge the Education Funding GapTo avoid triggering federal gift taxes, a family member can lend a student money for education at IRS-set interest rates. Here's what to keep in mind.
-
How an Irrevocable Trust Could Pay for EducationAn education trust can be set up for one person or multiple people, and the trust maker decides how the money should be used and at what age.
-
UTMA: A Flexible Alternative for Education Expenses and MoreThis custodial account can be used to pay for anything once the beneficiary is considered an adult in their state. There are some considerations, though.
-
Coverdell Education Savings Accounts: A Deep DiveWhile there are some limitations on income and contributions, as well as other restrictions, a Coverdell can be a bit more flexible than a 529 plan.
