How can I choose the best 529 plan for grandkids?


Q. My wife and I have about $15,000 to invest in a 529 plan to be split between our two granddaughters. It’s not a lot, but it is just sitting in an account and we want the girls to receive the maximum benefit from it. We live in New Jersey and our granddaughters live in Pennsylvania. They are 12 and 9 years old. What is the best way to get started?
— Gramps

A. First, this is a very kind offer. Don’t sell your generosity short!

529 plans are state specific, and depending on the state, you should look at that plan for its respective benefits.

Many state plans offer benefits, such as a nominal “scholarship” or a state tax benefit, said Michael Gibney, a certified financial planner with Modera Wealth Management in Westwood.

He said New Jersey offers up to a $3,000 scholarship, but you have to attend a New Jersey school. It also offers a one-time $750 matching grant for new accounts.

And starting in 2022, New Jersey taxpayers with gross income of $200,000 or less may qualify for a state income tax deduction for contributions of up to $10,000 per taxpayer, per year.

“In our research, these benefits are often outweighed by the expenses of the plan or the investment options in the plan,” Gibney said. “With this in mind, we often direct clients to plans offering low expenses and age-based investment options.”

He said he prefers age-based options because this puts the plan on autopilot and will automatically rebalance the investments to a more conservative option as the child reaches college age.

He recommends you check websites such as or, which review and rank 529 plans.

Email your questions to .

This story was originally published on Nov. 18, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.