A 911 call on 529 plans

Choosing a winning 529 college savings plan is much harder than many investors and financial advisors might think. Most savers, and even some planners, go straight to their home state’s website, then sign up.?

Maybe they assume you have to buy a state-sponsored plan in your state of residence, or in the state where you hope your child will go to college. With most 529s, you don’t.?

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The real work of evaluating the most financially beneficial plan involves looking at your home state’s income tax rate, the rate of the state in which a plan resides and whether your state and/or the plan’s state offer tax deductions or credits for contributions. And at, of course, a 529 plan’s fees.

With all the interplaying variables, it’s perhaps not surprising that six in 10 accounts are missing out on gains.?A new study from the National Bureau of Economic Research shows just how and why.

Read more: Nearly two-thirds of 529 accounts leave big money on the table. Here's why

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