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A Sunny View on Florida's 529 College Plan Options

Take a look to Florida for a sunny view on 529 college plan options. The Florida College Investment Plan (which is managed by the State of Florida) offers five great investment options. You can choose one or any combination of the investment options. Once in a calendar year, you can transfer the money that you have already invested from one option into another. Plus, you can change the allocation of new monies as often as you please.

For a moderate risk option you should look into the first option, which is a Fixed Income Investment. This option is invested mainly into things like mortgaged backed securities, U.S. Treasury Bonds and corporate bonds.

The second option for your 529 is a little riskier. It’s the U.S. Equity Investment Option, which makes equal allocations of your monies among an S&P 500 index portfolio, a large capitalization growth portfolio and a large capitalization value portfolio.

The next option is my favorite, an Age Based Option. This allows you the flexibility to choose how conservative, moderate and high risk you wish for your 529 investments to be. It’s based on the age of your child. You would have more monies invested in equities the younger your child is. As your child gets closer to college age, there would be an increase in the amount invested in fixed income investments.

The fourth of Florida’s 529 college options is a Balanced Investment Option. What this means for you is that your monies are equally distributed between the U.S. Equity Investment Option and the Fixed Income Investment Option. The goal of the Balanced Investment is to create long-term growth but with less risk than by investing alone in the U.S. Equity Investment Option. This portfolio is reviewed occasionally to keep a 50/50 allotment of monies to the U.S. Equity Investment Option and the Fixed Income Investment Option.

And last but not least is the 529 Money Market Fund Investment Option. This fund has a portfolio of short-term fixed income securities, money market and cash securities. The goal of this fund is to keep your main investment and obtain high liquidity through short-term securities.

The great thing about these 5 options for Florida’s 529 plan is that you can pick just one or a combination. Do whatever fits your financial goals best.

The fees for these accounts are minimal. Expect a $50 enrollment fee, and an asset management fee of 0.75%. Unlike a lot of other 529 plans, the Florida College Investment Plan charges no commissions or sales tax. You do not have to be a resident of Florida to participate so it’s a great plan for grandparents to invest for their grand children who live out of state. The minimum opening amount is $250 and your account has a maximum funding amount of $341,000. Once the total value of the accounts for the each child reaches $341,000 you cannot add any more monies. But the market value can continue to grow and you can have accounts of $341,000 for more than one child. There are no age restrictions either, so you can even open an account for an adult.

Imagine $341,000 stowed away for college that is growing tax deferred. And when your child is ready for college, qualified expenses are exempt from federal income tax. Plus, the great state of Florida has no income tax and the plan assets are exempt from Florida Intangible tax. There is a sunny view on Florida’s 529 plan options. Florida is a great place to have a 529 plan for your child.