529 College Savings Plan

[seand442]

My wife and I are looking to open a 529 for our kids. We still have a good bit of time as they are only 5. Does anyone have any experience or wisdom with these? I've researched them a bit, but the options are slightly overwhelming. A financial guy I spoke to recommended the Utah state plan, however there are 118 others according to the website I looked at earlier. Any and all suggestions are appreciated.

[SUBversive]

We started when kids were one. No time like the present. Do some research about the best state plan. we just went with our state at the time because it had a good review. Some state plans also added a contribution for opening a plan.

[subtona]

I have heard it can be better to Get 1 plan for several kids.
You can transfer it and I'm told it offers some tax protection in the event 1 of the children doesn't use it.

[btinl]

We opened an account for my son shortly after he was born and issued a SSN. CT provides a state income tax benefit. I don't think all states provide this benefit. Check with your home state.

[utc66]

I just started 2 plans last year for my 9 and 11 year old. Started much too late, I'll have to pay in extra to make up for lost time. My guess it doesn't matter which plan, just get them started. Apparently only the "wealthy" are taking advantage of them according to this article.

http://abcnews.go.com/Business/feder...ry?id=18001011

[crew]

I'm not a tax expert so keep that in mind.
In NYS you can deduct up to an annual contribution of $10,000 if you are married and filing jointly from NYS income taxes. The deduction is $5,000 for a single filer. I don't believe you get that deduction if the plan is anything other than a NYS 529. Other states may, or may not, have similar rules.
My son is a Junior in college and his 529 plan is fully funding his tuition, minus the Stafford loan. The Stafford loan is his "skin in the game".

[Widows Son]

Started one for my son right after he arrived. We live in Ohio but my Edward Jones advisor felt the plan from Virginia was much better. The tax savings isn't really much, only a small percentage of what you put in.

[Ed Rooney]

Maryland has a program where it can be prepaid.

[crew]

Originally Posted by Widows Son

Started one for my son right after he arrived. We live in Ohio but my Edward Jones advisor felt the plan from Virginia was much better. The tax savings isn't really much, only a small percentage of what you put in.

In NYS even an "average" income will have a marginal rate of over 6%. That's significant on a 529 contribution of $10,000.
In addition to the deduction I have been pleased with my plan's performance and expense ratio. If you're in a lower or no income tax state, you have the luxury of looking at all the plans out there. Nice.

[Fabrice M]

To me one of the problems is that very often they are tied to universities/colleges in your home state. What if you son or daughter wants to go to an out of state school? It seems like the choices are in most cases very narrow, and your choice of how the money is invested seem to be very limited as well. I wish it was more like a 401k type fund.

[azguy]

What state are you in ?

[stockae92]

Originally Posted by Fabrice M

To me one of the problems is that very often they are tied to universities/colleges in your home state. What if you son or daughter wants to go to an out of state school? It seems like the choices are in most cases very narrow, and your choice of how the money is invested seem to be very limited as well. I wish it was more like a 401k type fund.

That's what I thought.

So I didn't use 529, I do have saving for the education. I guess the down side is that we are missing out on some of the tax benefit.

I would love to have other options

[rr-nyc]

http://www.wsj.com/articles/push-to-...aid-1421958694

With these potential tax changes, I plan on opening a 529 as soon as my child in born


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[jjnd08]

Originally Posted by rr-nyc

http://www.wsj.com/articles/push-to-...aid-1421958694

With these potential tax changes, I plan on opening a 529 as soon as my child in born


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Saw this on CNBC. No way this gets passed.

[rr-nyc]

Originally Posted by jjnd08

Saw this on CNBC. No way this gets passed.

I don't know, it could very well pass

The good thing is that existing plans are safe


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[stockae92]

Really? Maybe I should just open an account so that its a "legacy account".

[bayerische]

Really glad I don't have to worry about things like this. And to have the worlds best education system at our "mercy".

[seand442]

Originally Posted by azguy

what state are you in ?

az

[rr-nyc]

Originally Posted by bayerische

Really glad I don't have to worry about things like this. And to have the worlds best education system at our "mercy".

You don't have to worry about it because you are taxed to death in order to pay for that "free" education. And this discussion relates to college tuition so while college tuition is free in Finland, only one (University of Helsinki) ranks in the top 100 universities in the world - at #100. In overall education in 2014, Finland has dropped down to 5th in the world (behind South Korea, Japan, Singapore, and Hong Kong). Either way, its still leaps ahead of the US but we still have the vast majority of the worlds top universities

[bayerische]

Originally Posted by rr-nyc

You don't have to worry about it because you are taxed to death in order to pay for that "free" education. And this discussion relates to college tuition so while college tuition is free in Finland, only one (University of Helsinki) ranks in the top 100 universities in the world - at #100. In overall education in 2014, Finland has dropped down to 5th in the world (behind South Korea, Japan, Singapore, and Hong Kong). Either way, its still leaps ahead of the US but we still have the vast majority of the worlds top universities

Wow! Did I hit a nerve...

[cathy liebchen]

Originally Posted by seand442

My wife and I are looking to open a 529 for our kids. We still have a good bit of time as they are only 5. Does anyone have any experience or wisdom with these? I've researched them a bit, but the options are slightly overwhelming. A financial guy I spoke to recommended the Utah state plan, however there are 118 others according to the website I looked at earlier. Any and all suggestions are appreciated.

our income is always too high to qualify for any of these things

[rr-nyc]

Originally Posted by bayerische

Wow! Did I hit a nerve...

Sorry- that was the wine talking


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[SMD]

Originally Posted by rr-nyc

I don't know, it could very well pass

The good thing is that existing plans are safe


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No, existing contributions are safe. Future contributions would not be. If this does pass, which it won't as long as the congress stays the same, watch out Roth IRA.

[rr-nyc]

Originally Posted by cathy liebchen

our income is always too high to qualify for any of these things

I have never seen anything having to do with income restrictions of opening or maintaining a 529 plan. There are benefits of no gift tax if you contribute to other accounts if you are that flush with cash


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