529 College Savings Plans: Missouri

529 College Savings Plans: Missouri

Well, folks, we’ve finally moved into the heartland of our lovely country and into a state that’s near and dear to my heart: Missouri. I spent the first two decades of my life in the Show Me State and make frequent trips back there to see family and friends, and today, I’m pleased to bring you info on that state’s college savings plans.

The Plans: Similarities

Missouri offers up two college savings plans. MOST: Missouri’s 529 Advisor Plan is the advisor-sold option while the other is also named MOST but is Missouri’s 529 College Savings Plan, the direct-sold version.

As far as similarities go, both plans are managed by Upromise Investments and can be linked to the Upromise rewards service. You need not be a resident of Missouri to participate in either plan. Also, a person can contribute to a Missouri savings plan for a single beneficiary up to $235,000. Another similarity is that contributing to a Missouri savings plan (or being a resident of Missouri and contributing to any 529 plan) can net you a deduction in figuring taxable income. Individuals may be able to deduct up to $8,000 per year in contributions and those who file jointly can deduct up to $16,000 per year in contributions. However, only contributions made by the account owner can be deducted except for husbands or wives filing jointly. Neither plan has enrollment or application fees in place.

The Plans: Differences

Each plan has its share of differences, too. The MOST direct-sold plan has a minimum contribution level of $25 (or $15 per pay period when option to contribute via payroll deduction). It also offers aged-based investment options (where the advisor-sold MOST plan does not), and its underlying investments are solely through Vanguard mutual funds. In addition, Missouri’s direct-sold MOST plan also offers six multi-fund and eight individual-fund portfolios for those preferring a static investment option. It also has a maintenance fee of $10 per year (though this can be waived for various reasons).

Lastly, Missouri’s direct-sold 529 plan has a matching contributions program that began just this year. Those who reside in Missouri with incomes less than an adjusted gross of $74,999 and are a parent or legal guardian of the beneficiary who have opened an account for a beneficiary (also a Missouri resident) who is age thirteen or older could be eligible to particpate in a matching grant. The state will match contributions to a plan dollar for dollar up to $500 per year with a lifetime maximum per beneficiary of $2500. This is a first-come, first serve kind of grant with a cap of $125,000 per year available for matching contributions.

On the other hand, the MOST 529 advisor-sold plan offers no such matching program, but it does offer a different selection of investment options. While there are no age-based options, there are some diverse static investment options including 3 ETF (or asset-allocation) portfolios, 14 individual-fund options and an anti-terror option. This plan’s minimum contributions also differ, with an initial minimum of $500 for lump-sum contributions. For those who elect to contribute automatically, that brings the minimum contribution level down to $50 per portfolio per month, $150 per quarter if transferring from a bank or $25 each payroll period for those contributing via payroll direct deposit. This plan’s underlying investments are comprised of several companies, including American Funds and T. Rowe Price.

So now that we’ve showed you what Missouri’s plans are, we’ll continue to look at the rest of the heartland’s college savings plans. Join us for more!

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Michelle's picture

Michelle wrote:

Tue, 06/05/2012 - 12:07 Comment #: 1

This is all good to know! I live in Missouri and I never really looked into this.

AverageJoe's picture

AverageJoe wrote:

Tue, 06/05/2012 - 15:22 Comment #: 2

I wonder why advisor sold plans aren't able to offer the matching (a great opportunity for investors, BTW....). This lack seems to set up a complaint people have about advisors in the first place: that they're after their own personal gain. When you set up a program and give bigger benefits to the one advisors CAN'T sell, guess what you're hoping for: complaints that advisors don't have their client's interest at heart. I think that's a design flaw, but would want to know "why" they didn't offer the match before making that accusation firmly.

femmefrugality's picture

femmefrugality wrote:

Tue, 06/05/2012 - 16:41 Comment #: 3

Love this series! So helpful when deciding which plan to choose!

Michelle's picture

Michelle wrote:

Wed, 06/06/2012 - 20:45 Comment #: 4

Sounds like my home state has some great options for us. Good to know!