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529 Savers - Should You Stay or Should You Go?

Weigh local benefits before ditching your home state's plan.

Morningstar recently released its annual Analyst Ratings for 529 College Savings Plans (see this article). These ratings can help guide investors toward the highest-quality plans, but there are good reasons--often tax-related--why a lower-rated plan may be a perfect fit for you. In many states, for example, you give up generous local benefits if you leave your home-based plan for another. Below we take a look at the myriad of ways states provide incentives for residents, which you can use to aid in choosing a plan.

Tax Benefits: Immediate Gratification
To compare the value of state 529 tax benefits, Morningstar crunched some numbers to evaluate the dollar-value benefit of a hypothetical investment. We used the following assumptions:

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