Vanguard Launches College-Savings Tool

Vanguard is announcing the launch of new Web-based college savings tools in the ‘Planning & Advice’ section of its website, www.vanguard.com . The goal of the program is to help investors determine the most appropriate investment vehicle for their needs, the company asserted in a press release. It will also allow investors to gauge future college costs, as well as compare their 529 plans to ones from other states. A online calculator will also allow investors to see if switching from a UGMA/UTMA to a 529 plan makes financial sense.

Vanguard is also announcing a reduced expense rations on six of its portfolios for its Vanguard 529 College Savings Plan for Nevada.

The reduced expense ratios will offer cost-cuts of up to 16%, according to the release. With over $650 million in assets, Vanguard asserts that it is now passing on economies of scale savings to investors in the Vanguard Growth, Mid-Cap, Small-Cap, Value, High-Yield Bond, and Inflation Protected Securities Indices. The Small-Cap Index will see the largest savings (16%), while Inflation Protected Securities will see the smallest (10%).

Vanguard is also announcing adjustments to the Vanguard 529 Plan’s 17-portfolio lineup. The Vanguard Interest Accumulation Portfolio will replace the Prime Money Market Portfolio with the goal of providing a higher yield with the same principal stability. Assets will also be moved from the Vanguard Long-Term Bond Index Portfolio to the Total Bond Market Index Portfolio in order to lesson volatility induced by changing interest rates.

The Vanguard Group, based in Valley Forge, Pennsylvania, is a provider of employer-sponsored retirement plan services and mutual funds. It offers 529 plans in 10 states with 529 assets under management totaling $6 billion.