I am researching a 529 plan for my kids. We are in California. It seems that a lot of links point to ScholarShare plan. Yet, I can't tell whether it is legit or not, mostly because I haven't heard of it before.
So is this a legitimate entry?
Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It only takes a minute to sign up.Sign up to join this community
To mhoran's point, yes, the company, TIAA-CREF is valid.
I'd focus on the expenses -
Their S&P fund (Index US Large Cap Equity Portfolio) shows a .11% total fee. You might choose this one, or others, but this number looks great to me. We are in an investment world where fees are still often over 1%, and we are conditioned to think anything less is a good fee. For me, the goal is less than .25% in your retirement fund, college savings, etc.
For a parent deciding on contributing to a 529 plan the first consideration is the plan run by the state government that will trigger a state income tax deduction. You do have to at least look at the annual fees for the program before jumping into the state program, but for many people the state program offers the best deal because of the state tax deduction.
Unfortunately for you California does not offer a state tax deduction for 529 plan contributions. Which means that you can pick another states program if the fees are more reasonable or if the investing options are better. You can even select a nationwide plan unaffiliated with a state.
Scholarshare is run by TIAA-CREF. TIAA-CREF is a large company that runs pension and 403(b) funds for many state and local governments. Many teacher unions use them.
They are legitimately authorized by the state of California:
The ScholarShare Investment Board sets investment policies and oversees all activities of ScholarShare, the state’s 529 college investment plan. The program enables Californians to save for college by putting money in tax-advantaged investments. After-tax contributions allow earnings to grow tax-deferred, and disbursements, when used for tuition and other qualified expenses, are federal and state tax-free. The ScholarShare Plan is managed by TIAA-CREF Tuition Financing, Inc.
The ScholarShare Investment Board also oversees the Governor’s Scholarship Programs and California Memorial Scholarship Program.
note: before picking a plan from another state make sure that they allow outside contributions.