re: 529 Plans - Are they worth the investment for Children?

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.

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529 assets owned by grandparents and nonparents (aunts/uncles) count as income to the beneficiary/kid on the FAFSA financial aid application.

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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.

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.

Tell me about your will and life insurance policies first. You

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.

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.

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.

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?

LA START plan is one of the best in the nation. I refer my clients to it

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.

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?