529 Option: Ohio CollegeAdvantage

Thursday, July 16, 2009 |

Update: I have selected West Virginia Smart 529 Select with DFA Funds. For the conclusion of my 529 series, go to 529 Plan Selection for My Second Daughter

This is the second part of the 529 option series. In this post, I will share with you my thoughts on Ohio CollegeAdvantage 529 plan. My hope is by the end of the series, I will choose one option for the younger daughter. See part 1 here.

Ohio CollegeAdvantage 529 plan is another good 529 plan. It has a really low fees if you opt for Vanguard investment. I can go with Vanguard Aggressive Age-Based Portfolio and for age 5 or younger, the portfolio consists of:
- 80% - Vanguard Total Stock Market Index
- 20% - Vanguard Developed Market Index

This is similar to Pennsylvania Vanguard Aggressive Age-Based option, however it has more international equity when compared to Pennsylvania (85-15 domestic-international proportion for PA). However, I wish they would have use Total International Stock Index since it includes Emerging market, albeit small proportion.

One big advantage for Ohio when compared to other that I have listed so far is my ability to choose the equity option myself. Thus I can build a portfolio with my preferred assets allocation. It would be something like this (Note: I will have to put more thought into the asset allocations if I go with Ohio):
- Age 0-3:

  • 40% - Vanguard 500
  • 30% - Vanguard Extended Market
  • 30% - Vanguard Developed Market
- Age 4-6:
  • 30% - Vanguard 500
  • 25% - Vanguard Extended Market
  • 25% - Vanguard Developed Market
  • 10% - Vanguard TIPS
  • 10% - Vanguard Income Portfolio (Note: Overlap with Vanguard TIPS, which is fine since I would prefer more TIPS instead of corporate bonds included in Total Bond Market)
The flexibility and relatively similar fees with Illinois Bright Start push Ohio CollegeAdvantage ahead of Illinois Bright Start, at least for me.


Post a Comment

Blog Widget by LinkWithin