GEORGIA

Georgia Higher Education Savings Plan

Type: Savings

Phone: 877-424-4377

State tax deduction for residents: $2,000 a year per beneficiary

Open to nonresidents: Yes

Refund provisions: Penalty of 10% of earnings

Minimum/maximum contributions: $25 / no annual contribution limit but a maximum account balance limit of $235,000

Managed by TIAA-CREF Tuition Financing, the Georgia Higher Education Savings Plan offers five investment choices: a managed allocation option, an aggressive managed allocation option, a 100% equity option, a balanced fund option and a guaranteed option. This plan is a good all-around choice, especially for state residents, who may qualify for a state-tax deduction for contributions. However, it fails to offer a static fixed-income fund. The aggressive age-based portfolio has outearned its peers over the past year. The fixed portfolios (100% stocks and 50/50) have average earnings. The guaranteed option has a 3% minimum return.

As with most TIAA-CREF plans, expenses are low, at 0.85% per year. Plus, there are no enrollment or annual maintenance fees. The tax deduction for contributions of up to $2,000 per year is available to couples earning $100,000 or less (or singles earning $50,000 or less) who itemize on their tax return. (That's worth up to $120 for most Georgia taxpayers.) And qualified withdrawals are exempt from state income tax.

State College Savings Plans