USAA Investments rating

USAA 529 College Savings Plan Review

About USAA

United Services Automobile Association (USAA) is a large financial services firm. This Fortune 500 company offers a variety of services including insurance, banking, and investing. USAA was founded in 1922 in San Antonio, Texas by Army officers who began by insuring each others cars. As the years went on, the successful association added more and more services. In order to become a member of USAA, a person must be active, former, or retired military personnel or a family member of someone who is, but many of its banking and investing products are open to everyone. But the company also offers many services to general public.

USAA 529 College Savings Plan

One of the many services they provide is a 529 College Savings Plan. This type of plan is a way to save money for future college costs, which are constantly on the rise. Any money earned while in the plan is not subject to federal income tax, contribution limits in some states are up to $370,000, and anyone can put money into it. There are no limits based on income.

Other benefits of the plan are: there are no age limits (adult can be the student), parents retain control of the money and are even able to have money in the account roll over to another child, and unlike some other assets, only a mere 5.6% of the balance will count every year for the federal aid formula which determines how much aid a student can get.

529 College Savings Plans are offered by different states, and anyone can invest in any state plan, however, there may be some tax benefits to investing in a plan in the participant’s home state. The 529 College Savings Plan from USAA is currently based out of Nevada.

Opening USAA 529 College Savings Plan

There are two ways to open one of these accounts with USAA. Participants can choose from a one time opening amount of $250, or they can opt to open one for just $50 a month when they agree to sign up with monthly debits from their checking or other bank account. The account owners have tax deferred earning and also tax free qualified distributions. For a gift contributor there is an amount of $65,000 ($130,000 for a married couple) to gift each year without having to incur estate or gift taxes.

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Investing Inside A Plan

USAA has six different fixed allocation portfolios to choose from, or there is also an age based portfolio that will automatically move any balance into an investment which is more conservative, as the child gets older. There is also a portfolio which protects the money from market volatility.

The USAA 529 College Savings Plan is partnered with both Upromise and Ugift. Upromise is a company that has been around since 2001 and rewards members for purchasing certain brands, shopping online through their site, and registering credit and debit cards to track qualifying purchases. It’s easy and free to set up an account, and linking the Upromise account with an existing USAA 529 College Savings Plan account takes only minutes and is done in a few simple steps. When the Upromise account reaches $50, the money is automatically transferred at the end of the quarter to the USAA 529 College Savings Plan account. Ugift is a program where parents can invite friends and family via email to gift money to the account or have their purchases go towards the account. There is even a link within the USAA account to do this.

USAA 529 College Savings Plan Fees

There is a $15 a year maintenance fee for anyone who holds an account who is not a resident of Nevada or holding the account for a resident of Nevada. There is also a low balance fee of $15 a year for any account which has less than $5,000 in it, unless the account holder is on the monthly automatic investment plan.

USAA 529 Plan Review Summary

Setting up a 529 account with USAA is a very simple and easy process. The links with Upromise and Ugift are easy to access and use, and could come in handy for many people. For an account holder with questions, it’s easy to either email customer support from within the website or call a toll free number. The customer service professionals are very helpful and knowledgeable, and other than entering account numbers and passwords, the service isn’t automated. You get a real person to speak with, every time. Overall, the USAA 529 College Savings Plan is above average in performance, ease of setting up and use, and customer service.


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