As of June 1, 2016, Ohio is accepting applications for 529 ABLE Accounts.  As we had anticipated, they are the first state to offer the plans.  While being first is certainly an advantage for Ohio, it does not mean that their plan will be optimal for all individuals.  To their credit, Ohio has chosen to use low-cost Vanguard mutual funds as the investment options for their plan.  They have also simplified the investment selection process by only offering five choices.

While residents of any state may opt to use the Ohio “STABLE” Account as their 529 ABLE Account, there will soon be other state options.  In reviewing the details of the Ohio plan, the fees charged for in-state residents are approximately half what they charge out-of-state account holders.  That being said, the costs are relatively low. In addition to the low fees for the underlying investments, account holders also face the following charges:

  • Ohio charges a $30/$60 (in-state/out-of-state) annual maintenance fee
  • An administrative fee of .19%/.45% on top of the Vanguard investment fee
  • A $50 fee for anyone who submits a paper application rather than an electronic application
  • A $10 per year fee if you want to receive paper statements

Clearly Ohio is encouraging electronic relationships.  They will also assess a $50 fee to rollover their plan to another state’s plan at a later date.

We will continue to monitor and evaluate the various 529 ABLE Accounts as other states make them available.  As a first option, Ohio’s plan has a number of positive attributes.  You can learn more about the Ohio plan and get some insights about how other plans will operate by visiting the Ohio STABLE Account website:

If you have questions about the appropriateness of an ABLE Account for your family’s special needs planning, please contact us.  We look forward to helping you evaluate your options.

Please find important disclosures about this resource HERE.