Plan Cost:
The cost for out-of-state residents is my biggest concern with the Alabama Higher Education 529 Fund. If you don’t live in Alabama and your financial advisor is recommending you buy this plan, you need to press them to explain their reasoning.For non-Alabama residents, this plan is available in the typical “load” mutual fund format you’d find at a full-service broker. In other words, they offer “A, B, and C” mutual fund shares. This means that you’ll either pay a hefty up-front load with a moderate annual fee, or pay nothing up-front and be subject to an even higher annual cost.
Cost is a different story for in-state residents, who can purchase the plan's “S” shares. These shares, available only if you or the plan’s beneficiary are Alabama residents, have no load and reasonable annual expenses.
Investment Options:
The Alabama Higher Education 529 Fund offers a variety of investment options. As with many other plans, they offer aged-based portfolios that become more conservative as your children get closer to college age.They also offer “static” portfolios (all stocks, fixed income, or cash), as well as the ability to invest in 13 different individual Van Kampen and BNY funds.
Investment Performance:
The most recent investment returns for the various options in the Alabama Higher Education Section 529 Fund are available on Van Kampen’s website.
