I have a daughter who will turn one years-old in January, and I want to open a Bright Start account for her at that time. My questions for you are:
1) Is the program legit and safe? In other words, can politicians, greedy financial experts, or other shady characters raid the accounts or pull any other shenanigans their well-known for in this state?
2) Do you recommend doing the “Age based,” index strategy for someone like me who’s not financially savvy?
Thanks for your time and advice.
Terry Says: I definitely believe in 529 College Savings plans– which allow your money to grow tax-free over the years to pay for college and associated expenses. Each state has its own plan — but you can invest in any state’s plan, and use the money for college in any state. The only advantage to investing in the Illinois Bright Start plan is a small tax deduction on your Illinois income tax return for your contribution up to $10,000. BUT, I DO NOT RECOMMEND Bright Start — and I haven’t for the past five years — every since they made some questionable investments, settled with the fund company that mis-managed the money, and then continued to use this same money management company to manage a portion of Bright Start. I find this inexcusable!
When I opened a 529 account for my young nephew last year, I went straight to Vanguard.com and opened an account in their plan (for a different state), knowing that the money will grow at less cost there, and under sound management. I suggest you do the same. And for my young nephew, I did use the age-based plan. But if your child is closer to college age, I would be a bit more conservative than these age-based plans.