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529 Plans - Are they worth the investment for Children?
Posted on 4/23/19 at 11:29 am
Posted on 4/23/19 at 11:29 am
I have three young children and would like to start a 529 for each to prepare for college. I am a Louisiana resident but I obviously don’t know where my kids will ultimately go to school. (Kids are 5, 9, 12)
Are there any recommended plans? Can the kids use the funds for any college nationally if i went with a Louisiana plan? Advice?
Are there any recommended plans? Can the kids use the funds for any college nationally if i went with a Louisiana plan? Advice?
This post was edited on 9/2/20 at 5:58 am
Posted on 4/23/19 at 11:50 am to cmlsu
I use the Louisiana 529 plan. It can be used outside the state or country as long as the college meets certain accreditations. You get "earning enhancements" at the end of each year in which the state matches a certain percentage of your contributions. The enhancement match ranges from 2%-14% depending on your taxable income.
Posted on 4/23/19 at 2:01 pm to cmlsu
The Louisiana plan is good for any accredited college so you'd be good. As the poster above states, they do provide a match.
Posted on 4/23/19 at 2:30 pm to TigerTatorTots
Thanks for the info...I’ll probably go with the Louisiana 529.
Posted on 4/23/19 at 3:43 pm to tigersfan1989
Which fund plan did you go with? Decent return? I will probably have to pick different ones for each kid based on their age
Posted on 4/23/19 at 6:41 pm to cmlsu
I went with the aged based moderate growth for my 9 year old and growth for my 1 year old. It looks like since inception for those funds it’s averaged 7% a year. I haven’t really checked on the other available funds in a while so there may be something with better returns or lower fees being offered now
This post was edited on 4/23/19 at 6:52 pm
Posted on 4/23/19 at 6:57 pm to cmlsu
Just curious but what savings goal are you aiming for? I’ve been struggling on how much to save monthly or total
Posted on 4/23/19 at 6:57 pm to cmlsu
LA START 529 is one of the best in the country.
Posted on 4/23/19 at 7:02 pm to cmlsu
I'm about to have my first kid and have been looking into the LA Start program as well. Have a few questions as I've been looking.
Are these better programs than anything I can get through vanguard?
I'm mainly looking to fund something for my kids K-12 as well as college. Are these programs the same or would I need to one for K-12 and one for college?
Are these better programs than anything I can get through vanguard?
I'm mainly looking to fund something for my kids K-12 as well as college. Are these programs the same or would I need to one for K-12 and one for college?
Posted on 4/23/19 at 7:23 pm to YankeeDoodle
I do know that most of the mutual funds offered for LA Start 529 are vanguard mutual funds and some of the expense ratios are as low as .04%. Start K12 would be the prior to college account and LA Start is for college.
Posted on 4/23/19 at 7:32 pm to tigersfan1989
How does a 529 affect the probability of getting a grant/financial aid? I’ve heard stories where a student received a lower grant/aid total than what they would have received if there wasn’t a 529.
Posted on 4/23/19 at 7:52 pm to GAFF
edited because I was wrong
This post was edited on 4/23/19 at 8:50 pm
Posted on 4/23/19 at 7:57 pm to GAFF
The 529 counts toward a parental asset at around 5% rate compared to if you held it in a personal brokerage account under the parent name they would attribute the value of 20% rate. I did a lot of this research when I opened a few accounts. Technically the 529 account is held in the parent name. So either way the feds will screw you just not as hard with the 529 when applying for federal aid.
This post was edited on 4/23/19 at 8:00 pm
Posted on 4/23/19 at 8:03 pm to tigersfan1989
Thanks. This seems like a solid plan considering the tax free gains and with the high cost of private schools, anything would help.
As far as your previous questions about savings plans, this is another thing I was wondering as well. Id probably be just putting a monthly amount ($100-200ish) into the K12 and LA Start. This is probably not near enough but I'm just hoping for this to supplement the yearly tuition costs.
As I get more to contribute,I will but retirement comes first for me right now.
As far as your previous questions about savings plans, this is another thing I was wondering as well. Id probably be just putting a monthly amount ($100-200ish) into the K12 and LA Start. This is probably not near enough but I'm just hoping for this to supplement the yearly tuition costs.
As I get more to contribute,I will but retirement comes first for me right now.
Posted on 4/24/19 at 7:07 am to tigersfan1989
I have an arbitrary amount of $200 per kid per month. I then plan to put some additional lump sums into the oldest’s account as it comes available. I hope that my oldest won’t need everything and i can snowball the unused portion down to the other kids.
Posted on 4/24/19 at 8:24 am to cmlsu
Have a little extra money i'd like to shoe away for kids high school (11, 9 and 7 years old). Would i be better off putting 10k into a K12 account for each kid or put the money in a CD ?
Posted on 4/25/19 at 1:27 pm to tigersfan1989
quote:
Just curious but what savings goal are you aiming for? I’ve been struggling on how much to save monthly or total
My goal is $100k per kid. I also max out the amount which is deductible in Alabama ($10k per year).
I adjust my monthly contributions as returns come in and shift contribution amounts between kids. My hope is that I can get the 1st kid through college and get a better feel for cost and then get ahead on the next 2. In a perfect scenario, I could have excess in the 529 to pay for #3's private school tuition.
For reference, my kids are 10, 7 and 2.
Posted on 4/25/19 at 4:23 pm to BamaAlum02
So you do roughly 830 per month per kid for college?
Posted on 4/26/19 at 11:17 am to tigersfan1989
No, I do about $600 total a month and then I give each of them about $1,000 in their 529 at Christmas.
$600 X 12 = $7,200 + ~$3k Xmas = $10k.
The deduction limit in AL is $10k total, not per kid.
The $600 is not evenly split because I didn't have enough to max out when we first had kids so my youngest has a head start on my oldest and I have to catch up the oldest. A good illustration on compounding interest and why you should start saving as early as possible.
$830 per kid per month would give you about $180k basis (no returns factored in). I couldn't afford that much nor would I want to spend that much on their college.
$600 X 12 = $7,200 + ~$3k Xmas = $10k.
The deduction limit in AL is $10k total, not per kid.
The $600 is not evenly split because I didn't have enough to max out when we first had kids so my youngest has a head start on my oldest and I have to catch up the oldest. A good illustration on compounding interest and why you should start saving as early as possible.
$830 per kid per month would give you about $180k basis (no returns factored in). I couldn't afford that much nor would I want to spend that much on their college.
Posted on 4/26/19 at 11:39 am to BamaAlum02
Ok yea that makes sense I was thinking that amount sounded seriously high
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