529 Plans: Colorado

We're slowly but steadily heading east as we continue our series on the United States' 529 plans. Up to the plate this week: Colorado. The state that his home to the Rockies and Mile High's Tim Tebow has an impressive four 529 college savings plans to choose from. It's worth noting an internet search for plans in this state will yield results for a fifth plan, the Prepaid Tuition Fund; however, this plan is no longer open and is being allowed to phase out.

The four plans to choose from in Colorado include three advisor-sold and one direct-sold. Even with the number of plans involved, there are some similarities between them. For instance, all four will allow a maximum contribution of $280,000 total for all plans for one beneficiary. Also common between them are some tax benefits; contributions to the plan can be deducted when computing Colorado income, to the extent of the contributor's federal taxable income (note that rollover contributions don't fit into this tax perk). Other similarities include no residency requirements and no enrollment fees. Another perk is that three of the four (Smart Choice College Savings Plan being the one who doesn't) participate in is a dollar-for-dollar match of up to $500 for lower- and middle-income families who have a beneficiary under the age of 13 at the time of applying and enrollment. Here are the highlights of the differences for each Colorado plan.

Direct Portfolio College Savings Plan

Upromise Investments and the Vanguard Group tag-team manage this savings plan that offers both age-based and static investment options utilizing Vanguard mutual funds. Another perk is that this plan can be linked with the Upromise Rewards program. This plan has a minimum initial contribution of $25 with a minimum of $25 after that. Participants with less than $10,000 balances who aren't a Colorado or Wyoming resident can expect a $20 maintenance fee; this can also be waived for those electing to go the paperless route.

Colorado Scholars Choice College Savings Program

This is the only advisor-sold option of the bunch. Managed by Legg Mason and also utilizing its and Thornburg funds, this plan offers both age-based and static investment options. A few years ago, the program also added three zero-coupon U.S. Treasury bond portfolios as options. Minimum contributions are $250 initially and $50 thereafter; this can be waived for employer-sponsered arrangements. For the Zero-Coupon Bond option, expect to invest $5,000 initially. Fees for this plan include a $20 maintenance fee, waived for accounts with at least $2,500 and/or for those who live in Colorado and Wyoming.

Colorado's Smart Choice College Savings Plan

This Colorado 529 plan offers something a bit different from the other plans: two FDIC-insured static options, including a one-year time savings account and a money market savings account. There are no age-based options. FirstBank Holding Company is the program manager of this plan which has no minimum contributions as well as no fees attached to it.

Colorado Stable Value Plus College Savings Program

The last of the Colorado plans is managed by MetLife and offers only static options and no aged-based. This single-option is a stable-value investment that features a new interest rate every year. There are no fees associated with this plan.

So, there you have it, the four plans of Colorado. Stay tuned as we continue to move into the central part of the United States and look at the details for each of this country's 529 plans.

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