Washington State just announced its own 529 Plan, a tax-advantaged way to save for private school and college. The plan is called DreamAhead, and it offers a variety of investment options with varying levels of customization and risk. The underlying funds for each option offered are managed by Fidelity, Vanguard, JP Morgan and Schwab, although you will have to search hard to find the actual names of the funds.
To get that information, scroll to the very bottom of the DreamAhead main website page, into the blue section with small type. In the first paragraph, you will see a link to the “Program Details Booklet.” Click on that link. Once you open the booklet, scroll to pages 33 to 36 to see where your money will actually be invested, under the portfolio options.
Why you should consider a 529 Plan? There are many reasons, in addition to the fact that you will not pay taxes on the investment returns if the money is used for education, including:
***Flexibility. You can change the names of the beneficiaries at any time. And due to the 2017 Tax Law, money in 529 Plans can be used to pay for K-12 schooling, as well as college and graduate school. Virtually all schools in the US and many abroad are covered. And there is no deadline as to when the money in the 529 must be used.
***You can front-load 529 Plans. Once you open a plan, you can give five years worth of funding upfront. Each person can give up to $15,000 annually to any number of beneficiaries without having to file a gift tax form. So $15,000 x 5 = $75,000 up front. Or $150,000 if husband and wife are both giving, for each 529 Plan.
NOTE: DreamAhead is a 529 college savings plan that works differently than GET, a WA plan to pay for tuition at WA State colleges and universities. If you already have a GET plan, you now have the option of rolling it over to a DreamAhead 529 Plan.