Question: Best state for a 529 plan: I narrowed it down. Please help?
Our daughter is only 3 months, but Best to start early, yes?
Best for low fees. If low investment costs are your primary concern, take a look at the Utah Educational Savings plan Trust. The plan serves up a menu of nine Vanguard index-fund portfolios and charges only 0.38% per year for its most expensive option. (The plan also levies a fee of $4 per $1,000 of your account balance up to a maximum of $20 annually.)
Best portfolios of underlying funds. The pre-fab portfolios offered by 529 plans are only as good as their underlying mutual funds. That's why we like Maryland College Investment Plan, which uses a great mix of funds from T. Rowe Price. Maryland cut its annual fees this year, and the plan's most expensive option costs just 0.99% annually.
Or....should I simply go for a state with a tax break???
Answer:
If your state of residence offers an income tax break when investing in a 529 plan of their state, then take it because those tax savings are too great to pass up and cannot be made up by performance alone by any other plan. If not, then consider what I did, by selecting a plan with an Index fund to mirror the market as a whole, which has very low expense ratios. Here is a good site to compare the various plans available:
http://www.savingforcollege.com/
P.s. And congratulations for starting a plan that early, the best thing you can do.