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re: 529 Plans - Are they worth the investment for Children?
Posted on 8/3/20 at 9:09 pm to tigersfan1989
Posted on 8/3/20 at 9:09 pm to tigersfan1989
So for financial aid, the 529 assets count as parental assets, or is it the owner of the account? I am trying to figure if this would be reason enough for a grandparent maintaining their own account for a grandchild. Am I overlooking something?
Posted on 8/3/20 at 10:04 pm to Belly
Assets are counted toward whoever owns the account. If a parent owns it for the kid, assets are counted as parents. If grandparents own it for grandchild, assets are grandparents.
Posted on 8/3/20 at 10:29 pm to Belly
529 assets owned by grandparents and nonparents (aunts/uncles) count as income to the beneficiary/kid on the FAFSA financial aid application. I think it's suggested to gift a year's amount to the parents each year after January or wait to distribute until the Junior year of the beneficiary to not adversely affect financial aid.
Posted on 8/3/20 at 11:34 pm to Breadcrumbs
quote:With the recent SECURE act, assets held by grandparents, aunts, uncles, etc. only count as income (non-taxed)if they are distributed, if they are held by not distributed, they do not count as assets or income on fasfa. And since the SECURE act allows for $10,000, used for student loans, it doesn’t seem like a bad idea (especially if one can get a subsidized loan) to take out some loans, use that to get some of the education read credit, and have them hold on to enough to cover that post-graduation so it doesn’t count as an asset on the FASFA.
529 assets owned by grandparents and nonparents (aunts/uncles) count as income to the beneficiary/kid on the FAFSA financial aid application.
I may me in the minority, but 529 plans seems bit overrated, to a certain extent, especially if they get too well funded as they lower the probability of get more idea needs-based aid plus the penalties if they aren’t used. Even the exemptions from the penalties for things like scholarships and the amount used to claim the education tax-credits, result in taxation on the earnings.
This post was edited on 8/3/20 at 11:37 pm
Posted on 9/1/20 at 11:04 pm to buckeye_vol
Anyone regularly contribute to their kids 529 and have a target? My kids are young: 5,3, and newborn. I’ve been putting money in each year and last couple years have hit the states max of $4800 per child. Currently have $24k in first child’s and $16k in second child’s. If I continue out with the same growth rate I expect to have close to $100k per kid in there which seems a little high, especially if they end up going to LSU. I know I can get the money back if they get a scholarship but that money will be penalized. Wanted to see what everyone was planning for in terms of expected yearly costs.
Posted on 9/1/20 at 11:53 pm to cmlsu
Tell me about your will and life insurance policies first. You
Posted on 9/2/20 at 12:20 am to TitleistProV1X
Each of our kids started with $25k and we contribute $1200/year. We were advised not to over contribute to these, but even our current contributions both should have well over $100k. We feel if they are excellent students and get a great opportunity at an expensive school, we'll figure out a way to make the money work. Hopefully they can get a scholarship but if not, we're prepared to help with loans or taking money out of our savings or Roth accounts.
Posted on 9/2/20 at 7:18 am to whitefoot
Sounds like we’re taking the same approach. I just fear that having $300k tied up in 529 accounts could definitely be too much. Odds are at least one or two of mine will go to LSU. I guess even if TOPS is still around they’ll end up spending a lot of money on housing/books and other things that are covered under the 529 rules.
Posted on 9/2/20 at 7:36 am to TitleistProV1X
300K seems excessive especially if there’s the possibility of scholarships. My daughter got a fully funded doctoral program and now she’s using the money on rent
Posted on 9/2/20 at 9:37 am to cgrand
Well it’s $100k per kid but hopefully one of them is smart enough to get a scholarship haha. Hard to judge when the oldest just turned 5 though.
Posted on 9/2/20 at 9:59 am to TitleistProV1X
I am targeting and on pace for $100k per kid by contributing $4800/yr. At 7 and 8 years there are just too many unknowns, but I can adjust contributions later if needed. While scholarships would cause an overage in the account, I would be elated if either it allowed me to reclaim my investment even with penalty. On the other hand, out of state tuition, graduate school, housing, etc. are variables that could impact total costs greatly if just considering a savings based solely on 4-years at a set tuition. I'm confident they will need the majority of it, but if they do not due to scholarship I will be happy to pay penalties and spend the money on something else when they are out of the house.
This post was edited on 9/2/20 at 10:01 am
Posted on 9/2/20 at 10:05 am to StinkBait72
Not sure about Louisiana's 529 but I know other states don't charge a penalty when withdrawing to offset a scholarship. You just have to pay taxes on it. No penalty
Posted on 9/2/20 at 12:53 pm to BamaAlum02
I’m gonna piggy back on this OP with a specific tax question.
If I’ve effectively eliminated my state tax liability and then contribute to my states 529 plan, can I carry forward that state tax deduction?? Or do I lose that for the year?
If I’ve effectively eliminated my state tax liability and then contribute to my states 529 plan, can I carry forward that state tax deduction?? Or do I lose that for the year?
Posted on 9/2/20 at 12:59 pm to TitleistProV1X
Yeah, we're doing $400/month per kid to max out at $4,800 each. My plan is to continue that for now and then if needed I can back off later.
Posted on 9/2/20 at 1:39 pm to cmlsu
LA START plan is one of the best in the nation. I refer my clients to it
Posted on 9/3/20 at 8:02 am to wasteland
I think they're worth it if anything for the peace of mind know at least some of your child's college will be paid for. Not sure about Louisiana but in Alabama it can be used for private K-12 education Plus anyone can contribute to the plan.
This post was edited on 9/3/20 at 8:14 am
Posted on 9/3/20 at 9:55 am to Ann Arbor Tiger
My child gets his mother's SS benefits. I am putting that exact amount in the 529. Do I own it? I mean, it's his money-I guess.
Posted on 9/3/20 at 4:27 pm to TigerTatorTots
quote:
The Louisiana plan is good for any accredited college so you'd be good.
Louisiana can’t repair roads. How could you have any faith in a Louisiana 529 plan?
Posted on 9/3/20 at 6:18 pm to wasteland
What happens if the child ends up not doing college? Can you roll the fund to another type of account?
Also if we move to another state I am assuming I have to move the funds to that states 529 plan?
Also if we move to another state I am assuming I have to move the funds to that states 529 plan?
This post was edited on 9/3/20 at 6:22 pm
Posted on 9/4/20 at 12:30 am to cmlsu
Buy Health Insurance
Buy life Insurance
Fully fund your retirement account
Then worry about college funds
Buy life Insurance
Fully fund your retirement account
Then worry about college funds
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