MAINE

Maine NextGen College Investing Plan

Type: Savings

Phone: 877-463-9843

State tax deduction for residents: No deduction

Open to nonresidents: Yes

Refund provisions: Penalty of 10% of earnings

Minimum/maximum contributions: $250 / $275,000

Other: The state offers a $200 per grant for new accounts, $100 per year for existing accounts, for residents with AGI $50,000 or less.

Run by Merrill Lynch, Maine's plan is expensive but relatively flexible. It offers four investment choices: an age-based portfolio, plus funds that invest 100% stocks, 75% stocks or all bonds. In the age-based portfolio, bonds and cash overtake stocks at around age 14.The age-based portofolios have had unimpressive returns in the last three years. However, you can tailor your own allocations by opening multiple accounts with different investment selections.

Expenses in Maine's plan are on the high side. There's a 0.55% asset-management fee and underlying fees that range from 0.77% to 1.12%. Expenses are even higher if you buy through a broker or financial advisers (though you get a broader range of investment choices that include AIM, Franklin Templeton and MFS funds.) There's also a $50 annual fee, waived for state residents, account balances over $20,000 or annual contributions exceeding $2,500.

State College Savings Plans