529 Plan Series: Pennsylvania’s “PA 529 Investment Plan”
Today marks another installment in the "529 Plans" series at www.JoeSangl.com!
Today, I will review Pennsylvania's 529 plan – the PA "529 Investment Plan".
This 529 program is managed by Upromise Investments and the investments are managed by Vanguard [I have reviewed Vanguard HERE].
What I Like About The PA 529 Investment Plan
- Investment Management By Vanguard. I really like Vanguard's performance and low expense ratios.
- Upromise Linked. You can link your Upromise qualifying purchases to this 529 which can help boost your savings.
- Tax Deduction For PA Taxpayers. From the PA 529 Investment Plan website: "For each beneficiary, PA residents may deduct up to $12,000 in contributions annually from their Pennsylvania state taxable income ($24,000 if married filing jointly, provided that each spouse has taxable income of $12,000)." If you have two children and have established two separate 529 accounts, then you can take an even larger deduction!
- Investment Options. There are three age-based options and ten individual investment portfolio options available. I like choices!
What I Would Like To See Improved
- This is a general improvement that I would like to see with all 529 plans, not just the PA 529 Investment Plan. I would like to see an option that allows one to withdraw money from the 529 plan penalty-free if one has paid for a child's college and there is no need for the college savings plan any longer. Right now, there is a 10% federal penalty tax if one pulls the money out of any 529 plan for anything other than qualified educational expenses. I would like to at least have the option to roll any extra money over to a Roth IRA – free of penalties.
Read reviews of other state 529 college savings plans HERE.
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Promoting Upromise is a great idea for any 529. This program allows people to get cash back from their purchases, that automatically gets put into the 529. It is kind of like the Bank of America keep the change program except instead of you putting the money in you are given free money from participating retailers. The only program that beats it is Baby Mint because they give a little better rebates.
This is a terrible plan, the service is extremely poor. I requested customer service and was told that I was speaking to customer service. Get it, they are state employees and have very little accountabilty. This was a mistake, take less of a return, but get a little customer service.