529 College Savings Plans in Missouri

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The MOST 529 Plan allows families across the country to begin investing in their children's college education as soon as possible with as small a deposit as they’d like. The plan offers investment options designed for savers at all risk levels. Its age-based options may suit investing newbies. These options automatically change their asset allocation to reduce risk as your child gets closer to college age. Those who have a better idea of what they want their investment mix to look like can invest in one or more individual portfolios. But if you require assistance, you can find a financial advisor to help you create a personalized investment strategy based on your financial needs and goals. 

How Do I Enroll in Missouri’s 529 Plan?

You can open an account with MOST 529 online. You’ll need to provide Social Security numbers or tax identification numbers as well as contact information and birthdates for yourself and your beneficiary. In addition, you’d need your bank account and routing numbers if you’re going to make your initial deposit electronically. You can contribute at your own pace or set up recurring transfers. In addition, you’d also need to choose your investment option at the time of enrollment. 

You can also download an enrollment kit at the plan’s website and mail in your application. 

How Much Does the MOST 529 Plan Cost?

Every portfolio in the MOST 529 Plan charges a total annual asset-based fee that combines a plan management fee and an investment management fee, as well as underlying mutual fund expenses. The current total annual asset-based fee ranges from 018% to 0.51%, making Missouri’s plan quite generous when it comes to fees among direct plans across the country. 

This fee is factored out of assets in the portfolio, so your account bears a pro-rata share of these expenses. 

Tax Benefits of Missouri’s 529 Plan

Missouri taxpayers can deduct up to $8,000 ($16,000 if married filing jointly) from their state taxable income annually. But regardless of your place of residence, the earnings on your contributions will grow tax-deferred while they’re invested. This means the government won’t touch what you’ve accumulated in the market and your money can make the most out of compound interest. In addition, withdrawals are tax-free too as long as you use them for qualified higher education expenses such as tuition and mandatory fees. 

However, you’d face some tax consequences if you take money out of your 529 plan for nearly anything that’s not a qualified higher education expense. This is known as a nonqualified withdrawal, and the earnings portion of the withdrawal may be subject to federal and state income tax as well as a 10% penalty. You may also need to pay back some or all of the state tax deductions you claimed on your contributions. Seek a financial advisor or tax expert to discuss how a nonqualified withdrawal may affect you based on your particular situation. 

What Are My Investment Options?

Missouri’s 529 plan offers an an investment menu with two kinds of portfolios. You can invest in age-based portfolios that automatically rebalance their asset allocation with an aim to become less risky as beneficiary approaches the college years. Or you can invest in an individual portfolio option. Each invests in a single underlying fund that covers all major asset classes and investment styles. 

Age-based options may suit a saver who’s not familiar with investing. You can choose a portfolio named after your beneficiary’s age. When you first open an account with these portfolios, your portfolio would be invested mostly in stocks with an aim to capture the most return by taking on more risk. But as your beneficiary gets closer to college, the portfolio will change gears and focus on safer securities like bonds and short-term reserves. The objective here is to protect what you’ve earned, while also aiming for steady returns. With this plan, however, you can choose an age-based portfolio on one of three tracks based on your risk profile. So if you have a strong risk tolerance, you can choose the aggressive track and still have a decent portion of your portfolio (40%) invested in stocks when your beneficiary reaches college age. Its conservative counterpart is not invested in stocks at all by that time, and instead invests entirely in bonds and short-term reserves. 

You can also choose from 16 individual portfolios. A financial advisor can help you invest in one or more of these options to create a customized investment strategy based on your personal risk tolerance and financial goals. To see how different investment mixes reflect different risk levels, use our asset allocation calculator. 

Established asset-management firms like Vanguard and TIAA-CREF manage the underlying mutual funds in the plan’s portfolios.

How Do I Withdraw Money from the MOST 529 Plan?

You can request a withdrawal online by logging on to your account. You can also fill out and mail a Withdrawal Request Form. Payments can be sent to your bank account or that of the beneficiary. You can also direct the funds to an eligible school.

But keep in mind that you're not limited to investing in one type of 529 plan, nor are you restricted to opening one sponsored by your state of residence. If you're interested in exploring several options, you can use our SmartAdvisor tool to find a financial professional who can help you invest in one or more plans by following a personalized savings strategy. The tool asks you some simple questions to link you with local advisors who can meet your particular needs.

Check Out Other 529 Plans

You do not have to live in Missouri to invest in its 529 plan. Take a look at these other states' 529 plans.