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Pros and Cons of 529 College Savings plans
Posted on 9/1/11 at 2:42 pm
Posted on 9/1/11 at 2:42 pm
I don't have kids but a good friend of my wife's does and is currently just putting $100 a month in a savings account for her 8-month old daughters future education. Has anyone on here used the 529 savings plans and if so would you recommend them? Thanks in advance.
4
Posted on 9/1/11 at 2:53 pm to TexasHog22
What I understand is you put money in now and you can take it out for QUALIFIED EDUCATIONAL EXPENSES. This could be books, tuition, living expenses, laptop, uniforms (ie nursing school), etc.
I am pretty sure that it can be used for elementary & high school tuition if a parent goes that route. I think it can be used also for vo-tech type schools.
Disadvantage is that if it's not used (ie FULL ride scholly, child doesn't go to school past high school, dies) you can't take it out without penalty.
Ours is set in our oldest son's name; any remaining will be rolled over to the next sibling.
I am pretty sure that it can be used for elementary & high school tuition if a parent goes that route. I think it can be used also for vo-tech type schools.
Disadvantage is that if it's not used (ie FULL ride scholly, child doesn't go to school past high school, dies) you can't take it out without penalty.
Ours is set in our oldest son's name; any remaining will be rolled over to the next sibling.
Posted on 9/1/11 at 2:56 pm to tiger91
I dont think you can use a 529 for elem or high school tuition.
Posted on 9/1/11 at 3:10 pm to jmtigers
You can not use a 529 for elem or high sch. You would want to look into a Coverdale(I think that's the name) for hs expenses.
Posted on 9/1/11 at 3:15 pm to TexasHog22
I put $150 a paycheck in for my son. I put it in the 3% guaranteed version instead of the managed ones. Probably a bad move, but I didn't know. State income tax deductible.
The other option is to freeze the tuition of state schools, at least in Mississippi, but I'm not really sure about it.
The other option is to freeze the tuition of state schools, at least in Mississippi, but I'm not really sure about it.
Posted on 9/1/11 at 3:32 pm to TexasHog22
Biggest con is you can't invest it how you want - you have to use whichever funds they give you.
Posted on 9/1/11 at 5:09 pm to guttata
Guess I was wrong ... don't plan on using our for that ... guess it's a good thing!
Posted on 9/1/11 at 5:19 pm to Tiger JJ
quote:
Biggest con is you can't invest it how you want - you have to use whichever funds they give you.
Well you can within a particular fund family. Just like a 401K.
Posted on 9/1/11 at 10:11 pm to Broke
Youre better off doing a conventional mutual fund.
Posted on 9/1/11 at 10:17 pm to TexasHog22
I've seen hundreds of these and not once have I ever seen one fully funded for a child's college. I think the intentions are good, but the parents never follow through.
The good thing is, if you have several kids you can transfer them to another child. Also if your grandparents/parents are loaded and they have an estate problem, a 529 would be a good vehicle for them to get some cash out of their estate with no tax penalty and also help out the next generation of the family.
The good thing is, if you have several kids you can transfer them to another child. Also if your grandparents/parents are loaded and they have an estate problem, a 529 would be a good vehicle for them to get some cash out of their estate with no tax penalty and also help out the next generation of the family.
Posted on 9/4/11 at 9:38 pm to guttata
quote:Coverdell
You would want to look into a Coverdale(I think that's the name) for hs expenses.
Posted on 9/6/11 at 8:34 am to Tiger JJ
quote:
Biggest con is you can't invest it how you want - you have to use whichever funds they give you.
You can shop other states' 529 plans and see if you like their investment strategies better. We go with another state because we liked the fund better.
Posted on 9/6/11 at 9:05 am to Gaston
quote:
I put it in the 3% guaranteed version instead of the managed ones. Probably a bad move, but I didn't know. State income tax deductible.
Probably not a bad move. Unless you think Wall Street is going to go that long without another royal 6-up that wipes out everyone's savings while those same people are taxed to bail them out
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