Retirement & Financial Planning Report

Should you select a 529 college savings plan on your own or should you use a financial professional? There are two common reasons for do-it-yourself 529 investing:

* Lower expenses. Broker-sold 529 plans generally have higher annual costs as well as sales charges of 1 percent to 5.75 percent of your contributions. Moreover, many 529 plans that you can buy directly (but few of the broker-sold plans) invest in index funds with low expense ratios.

* State benefits. Your state may offer special incentives for plans you purchase yourself. As a resident, you might be eligible for a state income tax deduction, a matching contribution, financial aid, or special protection of your account from creditors. While these benefits will not automatically make a direct investment a better deal, they should be factored into the search equation.

Generally, if you’re willing to do some research on your own, you should check into your home state’s 529 plan to see what’s offered for those who buy direct. If you’d prefer that your broker or financial advisor do the homework, be prepared to pay more or give up some financial advantage.