Let's Talk College Funds

START uses Vanguard funds.

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Seriously though, what happens when you have $100k saved for the kid and he doesn't go to in state college? Or college at all? Or he is on some sort of full ride? Can it be transferred to other kids or withdrawn?

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From what I have learned, the kid doesn't have to go to an in state college, it applies for out of state as well.

The funds can also be used for graduate work as well.

Beneficiaries can be changed, so if there is money left, it can go to another beneficiary.

The money can also be withdrawn with 10% penalty.

That's good to know. I need to do some more research on this and get it going.

The 10% penalty sucks but if you saved $100k and your kids are on full rides, I'd say you have reason to celebrate. Not only not paying for college but you just got handed an extra $90k you didn't think you'd ever have to play with.

Also, the funds can be used to pay for room & board, books, and other supplies, so even if the kids gets a scholarship, there will likely be some things that will need to be paid for.

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Thanks, as always, for the advice. You guys are great.

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Definitely the most useful board on this site. I'll be following this thread too as Mrs. BS and I are about to get started making future little BS's.

So should I sign up for the SMART program through the Louisiana website? Or will the Vanguard site automatically route me through that plan? Is that my best option?

SMART website

I have a start account for each kid then have separate saving/mutual fund. Don't want to put it all in 529 because of restrictions on use

Go directly through La Start website. My daughter starts LSU next year so I can speak from experience.

First, LA will give you a tax credit on your personal state return when you contribute upto $2400 in a year. That's upto $2400 for you and your spouse or upto $4800. You can put in more than $4800 a year but the tax credit is capped at that for the year. You can put in less of course, I'm just talking about the tax credit.

Second, LA will match a % of your contribution each year. It is a minimum of 2% upto 14% and is based strictly on your Adjusted Gross Income from last year tax return. So you can look at your return fom last year to see what your AGI was, then look at the chart on their site and you will know what % the state will match as you make your contribution this year. It could change each year if your AGI changes.

What if your child gets scholarships or doesn't go to school etc? No problem, you can give to a brother or sister or grandchild a neice or nephew and on and on.

Do a search for "LSU cost of attendance" and it I'll give you a breakdown of what can be taken out of the 529 to pay expenses. It will also give you a target amount to save for.

Our unique situation. For some reason we started a Rhode Island 529 plan years ago in addition to the LA 529 plan. You can have multiple plans even within the same state I.e. Grandparents have one for your child and you have one for your child and your ex has one for your child etc. When we knew she was going to LSU next year we had that RI plan money (over $80,000 at the time) transferred to LA 529. It was opened way back when in my ex-wife's name. As luck would have it, her income last year meant the state would match 9% of contribution so they paid 9% on all $80,000. She only got a state tax credit on the first $2400. Point is you can transfer from one state program to another and not lose anything.

Finally, you can set up to have monthly contributions come out of checking account or send one lump sum check in December. Just don't miss deadline if you do that. Even if you can't do more than $25/mo set it up now and make it automatic. Even if you don't save enough to pay for four years of school it could help pay for something.

Hope I didn't confuse anyone.