529 Plan: West Virginia vs. Ohio? Recommendations Please

[hrux]

This is an update from an earlier port on this subject.  After much due diligence, my family has narrowed its 529 college savings options to two plans, the state of Ohio College Advantage Plan or the West Virginia Smart Select Plan? The following is a summary comparing what their "balanced" portfolios represent and would greatly appreciate any advice on which you would select and why?  Please note that we are not eligible to participate in a coverdell account so unfortunately the PP is not an option for us...

West Virginia Balanced DFA Portfolio
Total Expenses: 0.70%
9% DFA International Core Equity (DFIEX)
36% DFA US Core Equity 2 (DFQTX)
22% DFA Intermediate Government (DFIGX)
11% DFA 5 Year Global Fixed Income (DFGBX)
11% DFA 2 Year Global Fixed Income (DFGFX)
11% DFA 1 Year Fixed Income (DFIHX)

Benefits: More of a small and value global tilt and more international small exposure. The DFA 5 Yr and 2 Yr Global Fixed Income are $ hedged with no currency exposure and use a variable maturity strategy based on yield curve. Some deflation protection by including intermediate treasuries.

Ohio College Advantage Portfolio
Total Expenses: 0.25%
40% Vanguard Total US Stock Market Index
10% Vanguard Developed Market Index
25% Vanguard Total Bond Market
12.5% Vanguard Inflation Protection Securities
12.5% Vanguard Prime Money Market

Benefits: lower costs by 0.45% versus West Virginia. Does not have much foreign small exposure or value tilt compared to DFA. Limited deflation protection with small position in money market, not enough to help lift portfolio during deflationary periods.

Thanks in advance for your insight.

[AdamA]

Ohio.

In my opinion, if you're not going to use the PP, a 50/50 stock bond split is probably the 2nd best option.  I think the Ohio comes closer to this, and also has less international exposure (a plus, IMO). 

[KevinW]

Ohio.

In my opinion, if you're not going to use the PP, a 50/50 stock bond split is probably the 2nd best option.   I think the Ohio comes closer to this, and also has less international exposure (a plus, IMO). 

+1 on this.  After the PP my second favorite allocation is 50% world stock / 50% total bond, and Ohio is closer to that.

Also between lower expenses and tilting, I'll take lower expenses every time.  Low expenses help no matter what.

[Tortoise]

Also between lower expenses and tilting, I'll take lower expenses every time.  Low expenses help no matter what.

Yes, especially when the Ohio plan's expenses are ~65% lower than those of the West Virginia plan.  That's a huge differential.

[smurff]

The 0.45% differential is bigger than most Big Bank savings accounts pay.  A differential like that, over the 10 to 18 years of a 529, could make the difference between having enough to pay for college with a cushion.

BTW, one of the great things about a 529 plan is that you can set it up to cover yourself as the beneficiary.  You can also transfer the assets in it into the name of your own family member(s).  This can be useful, for example, if you're working in an industry where you have to be "re-educated" every few years or so on your own dime, decide you want formal training for a favorite hobby, or decide you want to switch careers into a field or profession that will require new training. 

I used part of my 529 plan to go to GIA (Gemological Institute of America), where I studied one of my hobbies--diamonds, colored gemstones, and one of our favorite topics here, precious metals. 

It's also easier (emotionally) to set  up the 529 in your own name, then transfer a portion of it into the kid's name when they enroll in college.  That saves the emotional pain (mostly yours, but the kid's, too) of having to deny the funds to the kid when he or she decides to avoid college/vocational school to do something ridiculous and stupid after high school.  If the kids decide to forgo college and start a business, however, you could conceivably withdraw 529 funds and give it to them as seed money, but  there would be taxes to pay on that distribution (as seed money is not what 529 plans are designed for).

[Bonafede]

Ohio.

In my opinion, if you're not going to use the PP, a 50/50 stock bond split is probably the 2nd best option.   I think the Ohio comes closer to this, and also has less international exposure (a plus, IMO). 

I'm sure we've covered this somewhere, but this is the first post I came across. For the 50/50 option, would anyone recommend changing this even more conservative as the child nears 18? or keep the same split throughout?