College Bound Fund - can we move it?

[johna]

We live in Rhode Island. We have been investing in our daughter's college bound fund for the past 11 years. I just learned that this fund was ranked dead last. It is managed by Alliance. Can we move this fund to another firm, or are we just stuck with it? We lost over $300 last year.

[disneysteve]

What type of account is it? You can transfer a 529 to another provider. If your state gives a tax break that you've benefited from, there may be tax implications if you move it out of state so be wary of that.

Check savingforcollege.com for info and advice on the best ranked plans.

[Like2Plan]

We live in Rhode Island. We have been investing in our daughter's college bound fund for the past 11 years. I just learned that this fund was ranked dead last. It is managed by Alliance. Can we move this fund to another firm, or are we just stuck with it? We lost over $300 last year.

You should look in your prospectus for details on your plan. (It looks like you have several investment options within your college bound plan). It appears you have to contend with one other wrinkle if you do a transfer/rollover to another state's program:

"Link to RI College Bound WebsiteRI State Tax Deductible ContributionsRhode Island taxpayers who contribute to CollegeBoundfund can receive a state income tax deduction of up to $1,000 for married couples filing jointly and $500 for individual filers.

Contributions in excess of the annual limit can be carried forward and deducted in future years. If a participant makes a non-qualified withdrawal or a transfer/rollover to another state's program within two years after the deduction is taken, the amount of the deduction is "recaptured" and must be included in the participant's Rhode Island income.
Check with your tax advisor to see how 529 plans are treated for income tax purposes.
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