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Message
START (state college savings program)
Posted on 10/26/14 at 1:17 pm
Posted on 10/26/14 at 1:17 pm
I searched and did see a previous thread on the subject, but there wasn't a lot of response.
I've never really invested money before, so I'm completely ignorant on what to do.
There are several choices for funds to invest in from conservative to very aggressive.
How should the money be invested? In the other thread I saw someone say there were overlaps in the funds, what exactly does that mean?
They contribute anywhere from 2-14% based on adjusted gross income, I assume we'd be closer to the 2%. There's also a tax benefit for contributions. Is this benefit only for the owner (us) or if a grandparent contributed to it would they also get the tax benefit?
Help me!!
I've never really invested money before, so I'm completely ignorant on what to do.
There are several choices for funds to invest in from conservative to very aggressive.
How should the money be invested? In the other thread I saw someone say there were overlaps in the funds, what exactly does that mean?
They contribute anywhere from 2-14% based on adjusted gross income, I assume we'd be closer to the 2%. There's also a tax benefit for contributions. Is this benefit only for the owner (us) or if a grandparent contributed to it would they also get the tax benefit?
Help me!!
2
Posted on 10/26/14 at 1:27 pm to CoCo311
Tax benefit is tax free growth
Younger your kid more aggressive you can be
The state contribution is not much
Younger your kid more aggressive you can be
The state contribution is not much
Posted on 10/26/14 at 1:32 pm to yellowfin
Well, we have one in fourth, one in pre-k, and one that is still a solid 2/3 years away from school.
So maybe 70/30 for the 4th grader. 50/50 for the pre-k, and 30/70 for the baby?
So maybe 70/30 for the 4th grader. 50/50 for the pre-k, and 30/70 for the baby?
Posted on 10/26/14 at 1:33 pm to CoCo311
Yes, you get the state break. The grandparents would have to open an account as well to get the break. One beneficiary can have multiple accounts.
Posted on 10/26/14 at 1:39 pm to Janky
Thanks for the additional information.
Posted on 10/26/14 at 1:44 pm to CoCo311
I wouldn't mess around with different investments. Just use the target date funds.
Posted on 10/26/14 at 1:44 pm to CoCo311
4th grade is still 8 years from needing the money
I think both my kids are half age based aggressive and half mid cap
I wouldn't use start as your only method of college saving either
I think both my kids are half age based aggressive and half mid cap
I wouldn't use start as your only method of college saving either
Posted on 10/26/14 at 1:50 pm to yellowfin
quote:
I wouldn't use start as your only method of college saving either
Why?
I liked that they contributed something. They also have a fund or account that is no risk.
Posted on 10/26/14 at 1:54 pm to Janky
If I'm reading them correctly, all the target funds are through Vanguard. I'm comfortable with that because it's who my IRA was through.
Should the conservative portion be put into the no risk fund or the age based moderate fund?
Should the conservative portion be put into the no risk fund or the age based moderate fund?
Posted on 10/26/14 at 1:57 pm to CoCo311
There really shouldn't be a conservative portion at those young ages. However, the target date fund will gradually shift to a more conservative approach the closer the child gets to graduation date.
Posted on 10/26/14 at 2:05 pm to CoCo311
Kid may not go to college or get scholarship then you pay 10% penalty to get money not spent on qualified expenses
Posted on 10/26/14 at 2:06 pm to Janky
Well then, should a portion be put into the age based moderate fund and then the other portion be put into the age based aggressive track fund?
Posted on 10/26/14 at 2:49 pm to CoCo311
If I remember correctly you can't split for age based funds. I think you have to put 100% in the same one.
Posted on 10/26/14 at 3:25 pm to Janky
Ok, thank you!
Posted on 10/26/14 at 3:30 pm to CoCo311
Don't hesitate to call and ask them questions. They have always been very nice and helpful.
Posted on 10/26/14 at 4:50 pm to Janky
Oh, thank you!!
Posted on 10/27/14 at 1:07 pm to yellowfin
We have four kids and START has been great. 2 are in college, 2 are h.s. seniors.
If one of them doesn't go to college, you may transfer all funds to a different child with no penalty.
We had monthly deposits from our checking acct. that made investing easy. However, when we had larger chunks to deposit, we did so through their grandparent's (retired) account which led to a much larger state match due to AGI factors. We used the age-based moderate track fund.
If one of them doesn't go to college, you may transfer all funds to a different child with no penalty.
We had monthly deposits from our checking acct. that made investing easy. However, when we had larger chunks to deposit, we did so through their grandparent's (retired) account which led to a much larger state match due to AGI factors. We used the age-based moderate track fund.
Posted on 10/27/14 at 10:56 pm to yellowfin
you will have no problem spending start money even if they are on scholarship. It allows for about 12000 this semester. (room and board) dont get to focused on state match....focus on reduction of state taxes...Three kids and you put up 14400/year reduces state gross income and thus at 6% top tier yields additional savings of 864.
Posted on 10/28/14 at 1:47 am to breadtiger
quote:
get scholarship then you pay 10% penalty to get money not spent on qualified expenses
My understanding is if your kid gets a scholarship you can withdraw up to the amount of the scholarship without the 10% penalty. Doesnt have to be spent on qualified expenses if a scholarship is earned.
Posted on 10/28/14 at 5:21 am to breadtiger
You can also use the start $ for graduate school/law school/med school.
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