Ohio 529 College Savings Plan CollegeAdvantage


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Ohio 529 College Savings Plan

Ohio’s 529 college savings plan, CollegeAdvantage, provides investos a tax advantaged way to save for college education. Funds invested in CollegeAdvantage grow federal and state tax deferred. Disbursements from the plan are state and federal tax free as long as the funds are used for approved educational expenses. Additionally, Ohio taxpayers may deduct up to $2,000 per year off their Ohio taxable income per beneficiary. So if you contributed $2,000 to an Ohio CollegeAdvantage 529 plan for each of your three grandchildren, you could deduct $6,000 from your Ohio taxable income.

The Ohio CollegeAdvantage Plan offers several investment portfolios, including age-based, balanced options, bank options, capital preservation and fixed income options and Equities. The age-based portfolios include conservative, moderate and aggressive opportunities. The funds are re-allocated as the beneficiary grows towards college age, moving towards more conservative investments as time goes on. The balanced options, on the other hand, do not change as time goes on. If you want to change to more conservative investments as time passes, you will need to reallocate manually.

Don't want to take a chance on losing money with your investments? The bank option provides you a way to invest in either CD's (certificates of deposit) or a savings account with FDIC protection and favorable interest rates. The Capital Preservation and Fixed Income options invest in a variety of funds which are designed to earn without putting your capital at risk. However, these investments are not guaranteed by the FDIC and the value can fluctuate lower depending on market conditions.

For those who are not risk averse, there are several options within the CollegeAdvantage Plan which place most or all of the invested funds into stock funds of varied types. Perhaps more suitable for beneficiaries whose college education is still many years away, these funds can be very volatile over the short run. Get more information at the College Advantage website. You should also check with a financial advisor and tax advisor to see if a 529 investment is right for you.

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