Is your home state’s 529 plan always the best option? It really depends, but here are a few points to consider:

  • Each state differs on whether they offer state tax deductions or credits for 529 contributions, so check to see if your home state offers a tax benefit
  • Compare the performance of your home state’s investment options vs other states
  • Sometimes, an out-of-state 529 plan with stronger performance will exceed the value of a state tax deduction/credit that is combined with weaker performance of an in-state plan.
  • In many cases, the longer the investment horizon for the funds to grow tax-deferred, the less important the state tax benefit becomes

What are some other points to consider?

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